An Analysis of the Literature on International Unconventional Monetary Policy

Saroj Bhattarai and Christopher Neely

No 2016-021, Working Papers from Federal Reserve Bank of St. Louis

Abstract: This paper evaluates the literature on international unconventional monetary policies (UMP). Introducing market segmentation, limits-to-arbitrage, and time-consistent policy in standard models permits a theoretical role for UMP. Empirical studies provide compelling evidence that UMP influenced international asset prices and tail-risk in the desired manner. Calibrated modeling and vector autoregressive (VAR) exercises imply that these policies also improved macroeconomic outcomes. We assess the recent debate on the empirical evidence and discuss central bank assessments of UMP. Despite qualified successes, we recommend that UMP be reserved for crises and/or when the zero bound constrains conventional monetary policy.

Keywords: unconventional monetary policy; effective lower bound; quantitative easing; event study (search for similar items in EconPapers)
JEL-codes: E51 E58 E61 F31 G12 (search for similar items in EconPapers)
Pages: 90 pages
Date: 2016-11-28, Revised 2020-05-04
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
Note: Previous title [updated October 2018]: A Survey of the Empirical Literature on U.S. Unconventional Monetary Policy; Publisher DOI: https://doi.org/10.1257/jel.20201493
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Published in Journal of Economic Literature

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Journal Article: An Analysis of the Literature on International Unconventional Monetary Policy (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedlwp:2016-021

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DOI: 10.20955/wp.2016.021

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