Domestic and International Effects of the Eurosystem Expanded Asset Purchase Programme: A Structural Model-Based Analysis

Pietro Cova, Patrizio Pagano () and Massimiliano Pisani

IMF Economic Review, 2019, vol. 67, issue 2, No 3, 315-348

Abstract: Abstract This paper evaluates the domestic and international macroeconomic effects of the Eurosystem’s Asset Purchase Programme (APP) by means of a calibrated three-country dynamic general equilibrium model of the world economy. We find that the APP boosts domestic inflation and economic activity as liquidity increases and long-term interest rates fall. International spillovers are expansionary, and their size depends on the monetary policy stance of partner countries and on the response of international relative prices.

JEL-codes: E44 E52 E58 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1057/s41308-018-0071-7

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