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What are the macroeconomic effects of asset purchases?

Martin Weale () and Tomasz Wieladek

Journal of Monetary Economics, 2016, vol. 79, issue C, 81-93

Abstract: The impact of announcements of large-scale purchases of government bonds on real GDP and the CPI in the United Kingdom and the United States is explored with a Bayesian VAR, estimated on monthly data from 2009M3 to 2014M5. Four different identification schemes are used, all leaving the reactions of GDP and CPI unrestricted, and the transmission channels of the policy are examined. An asset purchase announcement of 1% of GDP leads to a statistically significant rise of 0.58% (0.25%) and 0.62% (0.32%) rise in real GDP and CPI for the US (UK). The transmission channels differ in the two countries.

Keywords: Quantitative easing; Unconventional monetary policy; Transmission mechanism; BVAR; Signaling and portfolio balance effects; Uncertainty and risk-taking channels (search for similar items in EconPapers)
Date: 2016
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Working Paper: What are the macroeconomic effects of asset purchases? (2015) Downloads
Working Paper: What are the macroeconomic effects of asset purchases? (2015) Downloads
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