Tightening by Stealth: Why keeping the balance sheet of the Federal Reserve constant is equivalent to a gradual exit

Daniel Gros

CEPS Papers from Centre for European Policy Studies

Abstract: Exiting from unconventional monetary policies is now a key issue for central banks, and especially for the US Federal Reserve. This paper argues that the Fed already began this exit some time ago, and that the relevant part of its balance sheet has already shrunk by about one-quarter of GDP. Pursuing the current policy of reinvesting would lead to a full exit within ten years.

Pages: 7 pages
Date: 2017-06
New Economics Papers: this item is included in nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:eps:cepswp:12652

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