Discussion of 'Capital Market Equilibrium with Imperfect Competition: The Case of the ECB's Asset Purchase Programme' by Koziol/Neus

摘要

The current Corona crisis makes us almost forget that about eight years ago a severe euro crisis shook the financial markets. It was Mario Draghi who, with his now-winged word of "whatever it takes", made sure that market participants regained their confidence. However, it was not only the dictum that helped to strengthen the markets. Rather, the establishment of the Securities Markets Program, and later the asset purchase program (APP), had the effect of providing sufficient liquidity in the markets and achieving price stability. Theoretical economists do not often deal with current political issues. For while it was understandable that the above-mentioned programs work in financial markets, details and effects on prices and market equilibrium are not so obvious. It is precisely these issues that are at the heart of Koziol and Neus' work. It should be noted, and the authors also refer to this at the beginning of their introduction, that the results of the paper do not only refer to the ECB programs. Other cases of price-inelastic demand are also conceivable, such as stock repurchase programs or funds that strictly follow an asset savings plan. In this respect, this is not only a discussion of current political decision, but also a very basic theoretical question.