Effectiveness and addictiveness of quantitative easing
| Autor: | Peter Karadi, Anton Nakov |
|---|---|
| Rok vydání: | 2021 |
| Předmět: |
Economics and Econometrics
media_common.quotation_subject 05 social sciences Monetary economics Interest rate Macroeconomic model Quantitative easing 0502 economics and business Economics Position (finance) Balance sheet Profitability index Yield curve 050207 economics Recapitalization Finance 050205 econometrics media_common |
| Zdroj: | Journal of Monetary Economics. 117:1096-1117 |
| ISSN: | 0304-3932 |
| DOI: | 10.1016/j.jmoneco.2020.09.002 |
| Popis: | This paper analyzes optimal asset-purchase policies in a macroeconomic model with banks, which face occasionally-binding balance-sheet constraints. It proves analytically that asset-purchase policies are effective in offsetting large financial disturbances, which impair banks’ capital position. It warns, however, that the policy can remain ineffective after non-financial shocks and might offer no substitute for interest rate policy when the latter is constrained by the lower bound. Furthermore, the asset-purchase policy is addictive because it flattens the yield curve, reduces the profitability of the banking sector, and therefore slows down its recapitalization. Consequently, the optimal exit from large central bank balance sheets is gradual. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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