The effects of unconventional monetary policy: what do central banks not include in their models? / Skutki niekonwencjonalnej polityki pieniê¿nej: czego banki centralne nie uwzglêdniaj¹w swoich modelach?

Andrzej Rzońca and Piotr Ciżkowicz ()

No 131, mBank - CASE Seminar Proceedings from CASE-Center for Social and Economic Research

Abstract: In 2009, for the first time since the end of World War II, the world economy shrank. This resulted from the economic downturn in highly developed countries and surprised most economists. According to the IMF forecast published in spring 2008, GDP growth in these countries was expected to accelerate from 1.3% in 2008 to 3.8%. In fact, the growth rate was 0.1% in 2008 and minus 3.7% in 2009 (White, 2012). Another surprise was the subsequent poor performance rates reported by the major economies, i.e. the United States and the Eurozone. Five years after the acute phase of the global financial crisis their growth rates have not returned to pre-crisis levels. In a response to the outbreak of the global crisis, the main central banks, namely the Fed and the European Central Bank (ECB), resolved to take some unconventional actions: (i) reducing interest rates to close to zero, (ii) committing to keep interest rates that low for a long time, (iii) introducing quantitative easing on a large scale. In this paper, the authors attempt to aswer what were the costs of the unconventional monetary policy adopted by Fed and EBC, as well as what effects it had on restructuring process, uncertainty, and the use of credit.

Keywords: Central Banks and Their Policies; Money Supply; Credit; Money multipliers; Mergers; Acquisitions; Restructuring; Corporate governance (search for similar items in EconPapers)
JEL-codes: E51 E58 G34 (search for similar items in EconPapers)
Pages: 44
Date: 2014-09
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