Arbeitspapier
Exit strategies and their impact on the Euro area: A model based view
This paper comments on the pros and cons of exit strategies. The focus is on the impact on the Euro area economy of the exit from unconventional monetary policies (UMP) by the Fed, which, appears to be the first central bank to lay out an exiting path. In this context, it discusses the issue of policy coordination between central banks in the light of the substantial potential spillover effects via capital flows and exchange rate adjustments of unconventional monetary policies. The risks of a premature versus a delayed exit are assessed. In particular, the paper looks at the risk associated to spillover effects from UMP exit and the different shapes of exit paths. It also analyse exit strategies in a wider context and the associated financial stability risks, with a specific focus on the role of uncertainty. The paper presents estimates of the impact of the Fed's exit from UMP in 2014 on the Euro area economy using new and innovative global IMF models. Finally, specific policy options to minimize exit risks are discussed and compared.
- Language
-
Englisch
- Bibliographic citation
-
Series: ROME Discussion Paper Series ; No. 14-01
- Classification
-
Wirtschaft
Financial Crises
Asset Pricing; Trading Volume; Bond Interest Rates
Central Banks and Their Policies
Crisis Management
- Subject
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federal funds rate
exit strategies
global spillovers
international policy coordination
sudden stop
- Event
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Geistige Schöpfung
- (who)
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Belke, Ansgar
- Event
-
Veröffentlichung
- (who)
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Research On Money in the Economy (ROME)
- (where)
-
s.l.
- (when)
-
2014
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Belke, Ansgar
- Research On Money in the Economy (ROME)
Time of origin
- 2014
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