I kicked myself off Twitter cuz I was tweeting too much. But I can always resort to my blog! This is pull not push technology, so blame yourself if you have had too much of my opining.
Eric Lonergan makes a very good point that Trichet’s refusal to do euro-QE, which I agree appears to have helped a lot, was not due to German resistance. The Germans might have been a constraint, but not a binding one, given that Trichet opposed QE anyway and criticized others for doing it.
To the extent that the discussion on Twitter was about how Trichet screwed up, which it mostly was, I think Eric’s point is dispositive, a word I just learned a couple years ago, and like. Well done.
But, I do think the Germans slowed down the approach of QE after Trichet’s departure and I do think they limited its scope and force, even when applied.
Also, check out this video, which is always a great source of amusement to me. Here is angry Trichet, pushing back against German criticism that policy is too stimulative. I love how he says impeccably. * He speaks far better English than I speak French, so I am not judging. But the arrogance and anger seem to go nicely with the gallic lilt. Fits the stereotype, fair or not.
To repeat, none of this is in opposition to Eric’s specific point about Trichet and QE itself. But separately, more broadly, the Germans resisted even Trichet’s limited efforts at conventional stimulus and I do think they slowed down Draghi.
* One thing that irritated me about Trichet at the time is that he was relating ECB policy to the inflation rate in Germany, as if policy were directed to the German inflation rate. We could easily imagine that ECB policy might have been successful if the euro-wide inflation rate were 2% and the rate in Germany were 4%. It was almost as if Trichet did not understand that Germany was part of the currency union, which as quite a feat, given that Trichet was overseeing that currency union, badly as it turned out.