The Impact of Quantitative Easing Policy on the Government Debt and the NPLs of the Eurozone Periphery Countries

Dionysios Chionis (), Fotios Mitropoulos () and Antonios Sarantidis
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Dionysios Chionis: Democritus University of Thrace
Fotios Mitropoulos: Democritus University of Thrace

Chapter Chapter 2 in Debt in Times of Crisis, 2021, pp 55-76 from Springer

Abstract: Abstract The ECB announced in 2015 the implementation of an expansionary monetary policy. The asset purchase program, a monetary experiment known as quantitative easing (QE), was launched in March 2015 by the ECB. The economic growth and inflation rates range at low levels at the Eurozone countries and quantitative easing could also have an expansionary effect on the aggregate demand and inflation rates. The main goal of this study is to estimate the effect of ECB’s QE policy on government debt and on the Non-Performing Loans (NPL) of the banking sector for the Eurozone periphery countries. A Changes-in-Changes approach is used, where Germany and France are set as a control group. Our results suggest that the QE policy has had a significant impact on government debt and the NPLs of the periphery countries. The research provides government regulators empirical insights into the effects of the recent QE policy.

Keywords: Quantitative easing; Government debt; Non-Performing loans; Changes-in-Changes (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-74162-4_2

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DOI: 10.1007/978-3-030-74162-4_2

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