Unconventional monetary policy: the assessment

Bowdler, Christopher; Radia, Amar

doi:10.1093/oxrep/grs037

Cited by 60 publications

(41 citation statements)

References 11 publications

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“…The first one is signaling channel [7]. Through the announcement that central bank would loosen monetary policy further, it becomes a signal for financial markets that they are not left alone [8].…”

Section: A Theoretical Backgroundmentioning

confidence: 99%

“…This may lead to a rationing in external funds. Concurrently, providing liquidity to financial institutions by Central Bank, especially with a long maturity, would reduce the long-term spreads [7]. This would in turn stimulate the aggregate demand.…”

Section: A Theoretical Backgroundmentioning

confidence: 99%

“…Consequently in November 2010, FED announced that it would expand its balance sheet with the second Large Scale Asset Purchase Program (LSAPP2), also known as QE2. In the scope of the program, FED bought 600 billion dollar long-term government bonds [7].…”

Section: B Policies Used After the Global Financial Crisismentioning

confidence: 99%

See 2 more Smart Citations

The Unconventional Monetary Policy: A Theoretical Approach

Yılmaz¹,

Ertürk²,

Eryilmaz³

2017

IJTEF

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Section: A Theoretical Backgroundmentioning

confidence: 99%

Section: A Theoretical Backgroundmentioning

confidence: 99%

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The Unconventional Monetary Policy: A Theoretical Approach

Yılmaz¹,

Ertürk²,

Eryilmaz³

2017

IJTEF

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“…There exist therefore a variety of different unconventional measures that fall under the label of QE, such as purchases of treasuries, purchases of private securities, and direct loans to banks, companies and households. Theoretical and practical issues on unconventional monetary policies are discussed in several studies (Krugman, 1998;Svensson, 2003;Bernanke and Reinhart, 2004;Orphanides, 2004;Borio and Disyatat, 2010;Bowdler and Radia, 2012;. Figure 1 sketches strategies and policy options available to central banks facing ZLB problems as well as the channels through which they may affect aggregate demand.…”

Section: Introductionmentioning

confidence: 99%

Evaluating quantitative easing: a DSGE approach

Falagiarda

2014

IJMEF

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This paper develops a simple Dynamic Stochastic General Equilibrium (DSGE) model capable of evaluating the effect of large purchases of treasuries by central banks. The model exhibits imperfect asset substitutability between government bonds of different maturities and a feedback from the term structure to the macroeconomy. Both are generated through the introduction of portfolio adjustment frictions. As a result, the model is able to isolate the portfolio rebalancing channel of Quantitative Easing (QE). This theoretical framework is employed to evaluate the impact on yields and the macroeconomy of large purchases of medium-and long-term treasuries recently carried out in the US and UK. The results from the calibrated model suggest that large asset purchases of government assets had stimulating effects in terms of lower long-term yields, and higher output and inflation.The size of the effects is nevertheless sensitive to the speed of the exit strategy chosen by monetary authorities.

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“…R. Werner providing empirical evidence of the noncash money creation in the process of lending transactions and without reference to the money base [9,10]. Distinctions of the monetary policy in the contemporary environment were studied by A. Kashyap, J. Stein [11,12], M. Farag, D. Harland, D. Nixon [13], C. Bowdler, A. Radia [14], L. Christiano and M. Eichenbaum [15]. The specifics of quantitative easing, as an unconventional lever of the money supply, was examined by J. Bridges, R. Thomas [16], S. Fullwiler, L. Wray [17], M.S.…”

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confidence: 99%

Modern Interest Rate Policy and the Phenomenon of Negative Interest Rates

Бурлачков¹

2017

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Importance The target interest rate is the main tool of the interest rate policy. Deflationary trends in leading economies undermined interest rates of central banks. It resulted in the phenomenon of negative interest rates on commercial banks' deposits. Objectives The research focuses on the specifics of the modern interest rate policy of central banks in leading economies. I also identify what caused negative interest rates and outline a methodological framework for the interest rate policy in the Russian economy. Methods The research is based on methods of logic and statistical analysis. Results I unveil distinctions of central banks' interest rate policies, while the monetary mechanism of the modern economy evolves. I unfold the specifics of regulating interest rates with interest rate corridors. The article highlights distinctions in setting interest rates and the way they influence lending and liquidity. I also underpin the nexus between the formation of interest rates and leverage level of the economy. Interest rates were found to impact deflationary trends. Conclusions and RelevanceThe specifics of the modern interest rate policies of central banks depends on the way the monetary mechanism evolves, i.e. the mechanism of the money supply. As central banks implemented payment systems, cash in correspondent accounts of commercial banks with central banks grew even more important. However, in targeting the rate on these reserves, central banks are constrained to influence interest rates on commercial bank's loans. That is why central banks are unable to effectively stimulate a growth in bank lending during the cyclical recession and have to apply an unconventional method to increase the money supply. © Publishing house FINANCE and CREDIT, 2016The editor-in-charge of this article was Irina M. Vechkanova Authorized translation by Irina M. Vechkanova Currently †

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Unconventional monetary policy: the assessment

Cited by 60 publications

References 11 publications

The Unconventional Monetary Policy: A Theoretical Approach

The Unconventional Monetary Policy: A Theoretical Approach

Evaluating quantitative easing: a DSGE approach

Modern Interest Rate Policy and the Phenomenon of Negative Interest Rates

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