Evaluate the potential effectiveness of ECB's monetary policy decision Essay

Evaluate the potential effectiveness of ECBs monetary form _or_ system of government decision on the recent quantitative easing programme within the Rurozone prudence - Essay Examplele tend to borrow less thus decreasing consumption of goods and services in the market as the income in rest home decreases, this reduces the rate of demand of goods and services making unemployment a major issue as people are retrenched and companies do not employ people (Tenreyro, 2008). This in turn affects the GDP of the country negatively.This paper focuses on the Eurozone and the effects of the Quantitative Easing policy introduced by the European Central Bank. The Eurozone is a term utilize to refer to all the countries that use the Euro as their means of trade within Europe. It compromises of 17 countries which are Germany, Austria, France, Belgium, Finland, Spain, Slovenia, Portugal, Slovakia, Italy, Malta, Cyprus, Netherlands, Luxembourg, Estonia, Greece and Ireland (Guny, 2004), each with v ery different economies. Some are demonstrable while others are struggling to find their place in the market making it very difficult to have a one size policy thats fits all. Some countries like Germany do have a stronger economy (Anderson, 2012) compared to others like Greece that have a developing or not very substantially established economy. These countries within the Eurozone like all other countries have their central bank named the European Central bank which was established in 1998 to regulate prices of commodities in particular equities through making monetary policies for countries within the Eurozone (Dominguez, 2006). The first monetary policy effected by the Euro zone in 2008 (Eretin, 2014) leading to a euro crisis as the ECB increase the rates of borrowing making achieving loans for financiers of firms or clients very difficult (Ciro, 2013). This lead to fewer consumption of goods and services by consumers that affected the demand curve as consumption reduced which eventually lead to inflation. This ended up touch on the rate of the currency the Euro as domestically produced goods became more expensive than the imports also affecting inflation, unemployment