At its core, the new ECB-MC model is designed along the lines of the Federal Reserve’s FRB/US model.9 The behavioural decision rules of private agents are based on optimisation and in the long run the model boils down to a neoclassical growth model.
Finally, the creation of firewalls in the form of the European Financial Stability Facility and European Stability Mechanism will contribute to isolating the euro area as a whole from financial turmoil affecting individual or a small group of countries.