Abstract:When economies face deflation and de-growth, Central Banks can only activate unconventional monetary policies. Quantitative easing inflates the Central Bank balance sheet, printing money and adding liquidity to the system while qualitative easing modifies the asset composition. With qualitative easing, Central Banks absorb the risk, flattening the yield curve. Consequences for banks and corporate borrowers may be substantial. Both measures increase inflation and reduce borrowing risk premiums, with an impact o… Show more
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