Arbeitspapier

Quantitative easing as a policy tool under the effective lower bound

This paper summarizes the international evidence on the performance of quantitative easing (QE) as a monetary policy tool when conventional policy rates are constrained by the effective lower bound (ELB). A large body of evidence suggests that expanding the central bank's balance sheet through large-scale asset purchases can provide effective stimulus under the ELB. Transmission channels for QE are broadly similar to those of conventional policy, notwithstanding some important but subtle differences. The effectiveness of QE may be affected by imperfect pass-through to asset prices, possible leakage through global capital reallocation, a reduced impact through the bank lending channel, and diminishing returns to additional rounds of QE. Although the benefits of QE appear, so far, to outweigh the costs, at some point this may be reversed. The exact "effective quantitative bound" where the costs of QE become larger than the benefits is as yet unknown. The summary of the evidence, however, suggests that QE is indeed an "adequate" substitute for monetary policy at the ELB, rather than a "perfect" one.

Sprache
Englisch

Erschienen in
Series: Bank of Canada Staff Discussion Paper ; No. 2015-14

Klassifikation
Wirtschaft
Economic History: Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations: General, International, or Comparative
Monetary Policy
Central Banks and Their Policies
Policy Objectives; Policy Designs and Consistency; Policy Coordination
Studies of Particular Policy Episodes
Thema
Central bank research
International topics
Monetary policy framework
Transmission of monetary policy
Recherches menées par les banques centrales
Questions internationales
Cadre de la politique monétaire
Transmission de la politique monétaire

Ereignis
Geistige Schöpfung
(wer)
Reza, Abeer
Santor, Eric
Suchanek, Lena
Ereignis
Veröffentlichung
(wer)
Bank of Canada
(wo)
Ottawa
(wann)
2015

DOI
doi:10.34989/sdp-2015-14
Handle
Letzte Aktualisierung
10.03.2025, 11:42 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Reza, Abeer
  • Santor, Eric
  • Suchanek, Lena
  • Bank of Canada

Entstanden

  • 2015

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