Central banks reacted to the financial crisis through sets of unconventional monetary policies that encompass the use of market operations, forward guidance and negative interest rates. We discuss the phenomena that have characterized balance sheet-based policies in the USA and in the EU, and we relate the effects of these policies to the financial stability objective. Our interpretation of the available empirical evidence is that QE lowered long-term yields and eased credit conditions, but had only mild effects on macroeconomic fundamentals. Also, the recent tapering process might lead to potentially dangerous contingencies. Among them, we discuss the portfolio reallocation toward riskier stocks, the possibility of asset prices bubbles, a lower central bank independence and a reduced distance between monetary and fiscal policies.

Unconventional Monetary Policy in the USA and in Europe

Andrea, Mazzocchetti
2019

Abstract

Central banks reacted to the financial crisis through sets of unconventional monetary policies that encompass the use of market operations, forward guidance and negative interest rates. We discuss the phenomena that have characterized balance sheet-based policies in the USA and in the EU, and we relate the effects of these policies to the financial stability objective. Our interpretation of the available empirical evidence is that QE lowered long-term yields and eased credit conditions, but had only mild effects on macroeconomic fundamentals. Also, the recent tapering process might lead to potentially dangerous contingencies. Among them, we discuss the portfolio reallocation toward riskier stocks, the possibility of asset prices bubbles, a lower central bank independence and a reduced distance between monetary and fiscal policies.
European Union: post crisis challenges and prospects for growth
File in questo prodotto:
File Dimensione Formato  
Publication_8.PDF

non disponibili

Tipologia: Documento in Post-print
Licenza: Accesso chiuso-personale
Dimensione 3.16 MB
Formato Adobe PDF
3.16 MB Adobe PDF   Visualizza/Apri

I documenti in ARCA sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/10278/3746071
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus ND
  • ???jsp.display-item.citation.isi??? ND
social impact