Posted

May 17, 2013 12:47:46 AM

Date

2013-04

Author

Under the guidance of Karl Habermeier, prepared by a team led by Tommaso Mancini-Griffoli, and comprising Jiaqian Chen, Simon Gray, Tomas Mondino, Tahsin Saadi Sedik, Hideyuki Tanimoto, Nico Valckx (MCM), Andrea Pescatori (RES), Silvia Sgherri (SPR), in collaboration with Bernardin Akitoby, Takuji Komatsuzaki, and Ariel Binder (FAD)

Affiliation

MCM, SPR, and FAD, International Monetary Fund

Title

Unconventional Monetary Policies - Recent Experiences and Prospects - Background Paper

Summary /
Abstract

This paper provides background information to the main Board paper, “The Role and Limits of Unconventional Monetary Policy.” This paper is divided in five distinct sections, each focused on a different topic covered in the main paper, though most relate to bond purchase programs. As a result, this paper centers on the experience of the United States Federal Reserve (Fed), the Bank of England (BOE) and the Bank of Japan (BOJ), mostly leaving the European Central Bank (ECB) aside given its focus on restoring the functioning of financial markets and intermediation. Section A explores whether bond purchase programs were effective at decreasing bond yields and, if so, through which channels. Section B goes one step further in evaluating whether bond purchase programs had—or can be expected to have—significant effects on real growth and inflation. Section C studies the spillover effects of bond purchases on both advanced and emerging market economies, using very similar methods as introduced in the first section. Section D breaks from the immediate focus on bond purchases to discuss how inflation might decrease the debt burden in advanced economies, in light of possible pressures that could fall (or be perceived to fall) on central banks. Finally, Section E discusses the possible risks of exiting given the very large central bank balance sheets.

Keywords

Monetary policy | United Kingdom | United States | Japan | European Central Bank | Central banks, Bonds, Capital markets, Spillovers, Inflation, Economic growth

URL

http://www.imf.org/external/np/pp/eng/2013/041813.pdf

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