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A Quantitative Easing Experiment

Adrian Penalver (), Nobuyuki Hanaki (), E. Akiyama, Yukihiko Funaki () and R. Ishikawa

Working papers from Banque de France

Abstract: This paper presents experimental evidence that quantitative easing can be effective in raising bond prices even if bonds and cash are perfect substitutes and the path of interest rates is fixed. Despite knowing the fundamental value of bonds, participants in the experiment believed that bond prices would exceed this value when they knew that a central bank would buy a large fraction of the market in a quantitative easing operation. By contrast, there was no average deviation of prices from fundamentals when trading only occurred between participants themselves.

Keywords: Quantitative Easing; Experimental asset markets. (search for similar items in EconPapers)
JEL-codes: C90 D84 G21 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2017
New Economics Papers: this item is included in nep-exp and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

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Journal Article: A quantitative easing experiment (2020) Downloads
Working Paper: A quantitative easing experiment (2020) Downloads
Working Paper: A Quantitative Easing Experiment (2018) Downloads
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