A Survey of the International Evidence and Lessons Learned About Unconventional Monetary Policies: Is a ‘New Normal’ In Our Future?

Lombardi, Doménico; Siklos, Pierre L.; Amand, Samantha St.

doi:10.1002/9781119565178.ch2

Cited by 7 publications

(7 citation statements)

References 89 publications

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“…This study is a survey that builds upon the findings of empirical research about unconventional monetary policy and the impact that such actions by major central banks have brought about in national, global financial markets and real economies. Previous papers such as Ugai (2007), Martin and Milas (2012), Joyce et al (2012a), Fawley and Neely (2013), Bhattarai and Neely (2016), Bundesbank (2016), Belke and Fahrholz (2018), Thornton (2017), Lombardi et al (2018) provide reviews of the academic literature and a meta-analysis (Papadamou et al , 2019a) on the economics of extraordinary measures by monetary authorities. Such effects are usually examined in event studies or VAR specifications.…”

Section: Introductionmentioning

confidence: 99%

A survey of empirical findings on unconventional central bank policies

Papadamou

Siriopoulos

Kyriazis

2020

JES

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PurposeThis paper presents an integrated overview of the empirical literature on the impact of all forms of unconventional monetary policy on macroeconomic variables and on markets.Design/methodology/approachThis survey covers the findings concerning portfolio rebalancing, signaling, liquidity, bank lending and confidence channels.FindingsThe positive effect of QE announcements on stock and bond prices seems to be unified across studies. A contagion effect from US QE to other emerging markets is identified, while currency devaluation is present in most cases for the country that its central bank adopted such policies. Moreover, impacts of non-conventional practices on GDP, inflation and unemployment are examined. The studies presenting weak instead of strong positive effects on inflation are more, and these studies, also, present weak positive effects on GDP growth.Originality/valueBased on the large body of research on non-conventional action taking, this is the first survey including effects of each country that adopted quantitative easing (QE) measures and that provides results from every methodology employed in order to estimate unconventional practices' impacts.

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Section: Introductionmentioning

confidence: 99%

A survey of empirical findings on unconventional central bank policies

Papadamou

Siriopoulos

Kyriazis

2020

JES

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“…Generally speaking, quantity variables matter much more than price variables in determining investment (Chirinko 1993), and the allegedly high elasticity of substitution between capital and labour, on which the supposition for interest rate's cuts to be effective is based, does not stand a systematic meta-analysis test ). When we turn to consider the effectiveness of unconventional monetary policy, the clearest answers come from the extensive reviews of Lombardi, Siklos, and St. Amand (2018) and Papadamou, Siriopoulos, and Kyriazis (2020). The former enquiry highlights the fact that, while unconventional monetary policies can alleviate the intensity of a financial crisis, they cannot hit the target of adequately boosting economic growth without a proper coordination with and the support of fiscal and structural policies.…”

Section: Is a Negative Interest Rate Policy An Adequate Response To Smentioning

confidence: 99%

Negative Interest Rate Policy to Fight Secular Stagnation: Unfeasible, Ineffective, Irrelevant, or Inadequate?

Bucchianico

2020

Review of Political Economy

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All three involve a judgement on the efficacy of a negative interest rate policy (NIRP) in tackling stagnation: according to the first it is unfeasible, according to the second it is ineffective (and even dangerous), and according to the third it is irrelevant. First, we argue that these theories face the fundamental difficulty constituted by the use of a (negative) natural (or equilibrium) rate of interest. We propose an original critique of the negative equilibrium rate of interest determined by the marginal efficiency of capital. Second, we claim that the negative interest rate policy is an inadequate tool to fight stagnation. While monitoring and fostering financial stability should be a fundamental role of monetary authorities, monetary policy is unable to stimulate growth, whereas fiscal policy is better suited to the task.

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“…First, the struggles of the BOJ and ECB to achieve their mandates illustrate the difficulties in raising inflation once longer-run inflation expectations become entrenched 38 For a review of financial and macroeconomic effects in the United States and abroad, see Andrade and others (2016); Lombardi, Siklos, and St. Amand (2018); Kuttner (2018); and Dell'Ariccia, Rabanal, and Sandri (2018) on the effect on yields and bank lending. On the international experience and spillovers, see Clarida (2019b), Martínez-García (2019), and the evidence in Haldane and others (2016), Chen and others (2016), and Martínez-García (2018).…”

Section: Monetary Policy Framework?mentioning

confidence: 99%

Monetary Policy and Economic Performance Since the Financial Crisis

et al. 2020

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We review macroeconomic performance over the period since the Global Financial Crisis and the challenges in the pursuit of the Federal Reserve's dual mandate. We characterize the use of forward guidance and balance sheet policies after the federal funds rate reached the effective lower bound. We also review the evidence on the efficacy of these tools and consider whether policymakers might have used them more forcefully. Finally, we examine the post-crisis experience of other major central banks with these policy tools.

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A Survey of the International Evidence and Lessons Learned About Unconventional Monetary Policies: Is a ‘New Normal’ In Our Future?

Cited by 7 publications

References 89 publications

A survey of empirical findings on unconventional central bank policies

A survey of empirical findings on unconventional central bank policies

Negative Interest Rate Policy to Fight Secular Stagnation: Unfeasible, Ineffective, Irrelevant, or Inadequate?

Monetary Policy and Economic Performance Since the Financial Crisis

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