Exiting the Unconventional Monetary Policies

Badescu Bogdan ()
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Badescu Bogdan: The Bucharest University of Economic Studies

Ovidius University Annals, Economic Sciences Series, 2015, vol. XV, issue 1, 660-664

Abstract: Unconventional monetary policies have provided the financial sector with the time needed to implement the necessary reforms, but it is unclear how useful they were to support the economic activity. From this point of view, perhaps the most important lesson of the crisis is that there is a real need for a resilient financial system and the path to that is appropriate regulation. Exiting the PMN is hampered by the fact that it is difficult to estimate when benefits of these policies will be dominated by induced risks. Subsequently, it is needed to compare the effects of an early exit vs. a late one, which means making a choice between reducing the risk of inflation in the future (early exit) and supporting growth (late exit). Return to normality will imply two courses of action: the normalization of the policy rate and of the size of central banks’ balance sheet.

Keywords: unconventional monetary policies; policy rate; inflation; economic growth (search for similar items in EconPapers)
JEL-codes: E42 E52 E58 (search for similar items in EconPapers)
Date: 2015
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