Macroeconomic effects of an open-ended asset purchase programme

Lorenzo Burlon, Alessandro Notarpietro and Massimiliano Pisani

Journal of Policy Modeling, 2019, vol. 41, issue 6, 1144-1159

Abstract: We evaluate the effectiveness of an open-ended asset purchase programme (APP) using a New Keynesian model of euro area. We assume that the central bank does not announce the ending date of the programme, and agents form their expectations about possible additional purchases beyond the horizon of the announcement according to the central bank reaction function, that links the purchases to the expected inflation gap. It is showed that the open-ended APP is more effective in stimulating macroeconomic conditions than committing ex ante to an ending date.

Keywords: Central bank communication; Open-ended announcement; Non-standard monetary policy; DSGE models; Euro area (search for similar items in EconPapers)
JEL-codes: E43 E44 E52 E58 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (11)

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Working Paper: Macroeconomic effects of an open-ended Asset Purchase Programme (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:41:y:2019:i:6:p:1144-1159

DOI: 10.1016/j.jpolmod.2019.03.005

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