Early exit from ECB bond purchase program could reduce GDP growth and inflation

Artikel

The European Central Bank is planning a gradual reduction of government bond purchases under the asset purchase program it initiated in 2015. The present study by the German Institute for Economic Research analyzes the potential macroeconomic implications of different exit strategies. The authors examined the potential effects of a reduction in net purchase volume, an early exit, and a faster exit from the program on output and inflation in the euro area. Model simulations showed that economic growth and inflation rates would decrease in all three scenarios. However, the effects of the scenario with reduced asset purchases are less severe than those of an exit from the program that is earlier or faster than expected. In particular, an early exit from the program should significantly affect inflation rates, an effect that the European Central Bank should factor into its decision-making process.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: DIW Economic Bulletin ; ISSN: 2192-7219 ; Volume: 7 ; Year: 2017 ; Issue: 49 ; Pages: 533-540 ; Berlin: Deutsches Institut für Wirtschaftsforschung (DIW)

Classification and Topics

• Classification: Wirtschaft ; Monetary Policy ; Central Banks and Their Policies
• Subject: Tapering ; Quantitative Easing ; Monetary Policy

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Clemens, Marius ; Gebauer, Stefan ; Rieth, Malte
• Event: Veröffentlichung
• (who): Deutsches Institut für Wirtschaftsforschung (DIW)
• (where): Berlin
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/172945
• Last update: 10.03.2025, 11:41 AM CET