How Unconventional Are Large-Scale Asset Purchases?

Carlo Rosa and Andrea Tambalotti

No 20140303, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: The large-scale asset purchases (LSAPs) undertaken by the Fed starting in late November 2008 are widely considered to be a form of ?unconventional? monetary policy. Although these interventions are certainly unprecedented, this post shows that their effect on financial conditions is not that unconventional, in the sense that the relative effects of the LSAPs on returns across broad asset classes?nominal and real government bonds, stocks, and foreign exchange?are quite similar to those of more conventional policies, such as a reduction in the federal funds rate (FFR).

Keywords: financial conditions; Monetary policy; asset prices (search for similar items in EconPapers)
JEL-codes: E5 G1 (search for similar items in EconPapers)
Date: 2014-03-03
New Economics Papers: this item is included in nep-mac and nep-mon
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