Recently it seems that the world's economic hopes are in central bankers' hands. The market hangs on every word that comes from the Federal Reserve and the European Central Bank, hoping to hear some hint that another round of monetary stimulus is coming down the pike. 

This intense focus on the central banks is not entirely surprising. Given how sclerotic the political process has been in Europe and the United States, investors are turning to the semiautonomous entities to give the global economy a push. Certainly, good monetary policy is crucial to getting the economy back on more solid footing. But it alone is not sufficient. Reasonable fiscal policy and some painful corrections are needed, as well. Anyone hoping for a monetary policy miracle will likely find themselves disappointed.

How Much Firepower Does the ECB Have? 
So more than four years after the financial crisis, what can the banks do now? The answer is somewhat different on each side of the Atlantic. The Europeans have a stronger claim that their central bank can be transformative in turning around the economy. The ECB has more policy options at its disposable that can plausibly make a difference. But just because they can be useful doesn't mean that they alone can solve Europe's woes or bring the continent back to growth.