A Northwestern University Professor Discusses European Central Bank Policy

Whenever a Fed economist gives two thumbs up to an outside economist, you know some very bad theory is being promoted. John Robertson, a vice president and senior economist in the Atlanta Fed’s research department, writes:

Last month, we at the Atlanta Fed had the great pleasure of hosting Sergio Rebelo [ the Tokai Bank Distinguished Professor of International Finance at Northwestern University’s Kellogg School of Management. He is a fellow of the Econometric Society, the National Bureau of Economic Research, and the Center for Economic Policy Research.] for a couple of days. While he was here, we asked Sergio to share his thoughts on a wide range of current economic topics. Here is a snippet of a Q&A we had with him about the state of the euro-area economy:

What do you see as the role for euro area monetary policy in that context [the the United States financial crisis and the sovereign debt crisis in the euro area]?

It seems clear that more expansionary monetary policy would have been helpful.