Joseph E. Gagnon, (2018), “When the Next Recession Hits: A User’s Guide for Future QE”, Peterson Institute for International Economics, 14 Νοεμβρίου
The global financial crisis of a decade ago pushed economies into deep recessions. To prevent these recessions from becoming depressions, several major central banks made large-scale purchases of long-term bonds and other financial assets to ease financial conditions and support spending.[1] These actions, known as quantitative easing (QE), were hardly without controversy. Critics warned that QE would fuel inflation, undercut creditors, and damage the credibility of central banks themselves. But as I have argued since the crisis, including in my recent Policy Brief with Brian Sack, QE was a success and if anything should have been undertaken more aggressively. The important thing now is to draw on lessons learned to fashion an approach for QE that smoothly and effectively transitions from conventional interest rate policy at the effective lower bound on interest rates.
The main reason for thinking ahead is that, with interest rates expected to remain at historically low levels, central banks are likely to encounter the lower bound again in the next recession. Having a well-articulated plan for policy at the lower bound is essential. Our Policy Brief shows that QE in the form of purchases of long-term assets in moderate steps and with possible inertia can provide economic stimulus in much the same way as cuts in the conventional policy interest rate.
Σχετικές Αναρτήσεις
- Joseph E. Gagnon, Joseph E. Gagnon, (2018), «QE: A User’s Guide», Policy Brief, PIIE, Οκτώβριος
- Hüttl, Pia, Pichler, David, (2017), «An update: sovereign bond holdings in the euro area – the impact of quantitative easing», Bruegel, 10 Οκτωβρίου