Quantitative Easing and Excess Reserves

Valentin Jouvanceau

Working Papers from HAL

Abstract: What are the impacts of a flush of interest-bearing excess reserves to the real economy? Surprisingly, the theoretical literature remains silent about this question. We address this issue in a new Keynesian model with various financial frictions and reserve requirements in the balance sheet of bankers. Modeling QE by the supply of excess reserves, allow for endogenous changes in the relative supply of financial assets. We find that this mechanism is crucial to identify and disentangle between the portfolio balance, the credit and the asset prices channels of QE. Further, we demonstrate that the macroeconomic effects of QE are rather weak and mainly transmitted through the asset prices channel.

Keywords: Quantitative Easing; Excess Reserves; Transmission Channels; Securitization Crisis (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-dge and nep-mon
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-02053237v1
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://shs.hal.science/halshs-02053237v1/document (application/pdf)

Related works:
Working Paper: Quantitative Easing and Excess Reserves (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:halshs-02053237

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().