EconPapers    
Economics at your fingertips  
 

Impact of the ECB Quantitative Easing on the International Investment Position

Rafael Cezar and Maéva Silvestrini

International Economics, 2021, issue 165, 241-263

Abstract: This paper aims at estimating the impact of Quantitative Easing (QE) implemented by the ECB on external assets and liabilities recorded in the International Investment Position (IIP). Indeed, monetary policy affects the prices of securities and exchange rates, as well as international capital flows. These movements affect the IIP and can trigger important global imbalances and financial stability issues. Our analysis focuses on France. We find that QE affected all the items composing its IIP. Announcements played a stronger role compared to amounts purchased. We also decompose changes in the IIP into flows and valuation effects and show that the latter was the most reactive to the programme. Finally, we quantify the overall effect by establishing counterfactual scenarios in the absence of QE. The strong impact observed initially was rapidly counterbalanced; suggesting an over-adjustment phenomenon at the beginning of the programme.

Keywords: Monetary policy; Quantitative Easing; Balance of payments; International investment position (search for similar items in EconPapers)
JEL-codes: E52 F32 G15 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.sciencedirect.com/science/article/pii/S2110701720302912 (text/html)

Related works:
Journal Article: Impact of the ECB Quantitative Easing on the International Investment Position (2021) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cii:cepiie:2021-q1-165-15

Access Statistics for this article

More articles in International Economics from CEPII research center Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2024-05-18
Handle: RePEc:cii:cepiie:2021-q1-165-15