A Structural Investigation of Quantitative Easing

Gregor Boehl, Gavin Goy and Felix Strobel
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Gavin Goy: De Nederlandsche Bank

The Review of Economics and Statistics, 2024, vol. 106, issue 4, 1028-1044

Abstract: Using nonlinear Bayesian methods that fully account for the binding zero lower bound (ZLB), we estimate a large-scale macrofinance DSGE model on U.S. data. Counterfactual analysis suggests that by easing financing conditions, quantitative easing facilitated a net increase in aggregate investment. The resulting expansion of firms’ production capacities lowered their marginal costs. These disinflationary supply side effects dominated over the inflationary effects induced by the stimulus to aggregate demand. At the ZLB, the concomitant rise in real interest rates, in turn, induced a net fall in aggregate consumption.

Date: 2024
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https://doi.org/10.1162/rest_a_01205
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Related works:
Working Paper: A structural investigation of quantitative easing (2021)
Working Paper: A Structural Investigation of Quantitative Easing (2020)
Working Paper: A Structural Investigation of Quantitative Easing (2020)
Working Paper: A structural investigation of quantitative easing (2020)
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