Macroscope | ECB policymakers need to crank up stimulus measures to boost economic recovery

If the US Federal Reserve's monetary stimulus after the 2008 crash is the Rolls-Royce of quantitative easing programmes, so far the European Central Bank's model is more like former East Germany's tiny Trabant.

It is the wrong Germany for the ECB to be emulating, when Daimler and BMW are available as world-beating alternatives.

Even with the ECB's foot pressed hard to the floor, there seems to be little under the bonnet to power the euro zone economy forward.

The transmission effect so far has been nothing like the experience of the US and British economies, which both saw growth rebounding sharply in response to radical QE quick fixes.

US policymakers waged an all-out assault against the forces of recession after the 2008 crash, embracing a plethora of monetary and fiscal tools to jump-start recovery. Interest rates were slashed to zero, the Fed bought bonds on a massive scale, the US dollar was allowed to go into free fall and the government gave a huge fiscal boost to the economy by letting the budget deficit spiral higher.

It took three successive waves of QE, pumping the Fed's balance sheet up to US$4.5 trillion, but the medicine worked. It was six years before the US central bank began tapering its QE programme after a reasonable recovery in economic growth was assured.