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Events

CEMAP Seminar Series: Vincent Sterk, University College London

Wednesday, 29 May 2019
13:00 to 14:00
Vincent Sterk,University College London
Durham University Business School, MHL 452

Title: QUANTITATIVE EASING

Abstract:

Is Quantitative Easing (QE) an effective substitute for conventional monetary policy?

We study this question using a heterogeneous-agents model with nominal rigidities,

as well as liquid and partially liquid wealth. The direct effect of QE is determined by

the difference in marginal propensities to consume out of the two types of wealth,

which is large according to empirical studies. QE, therefore, emerges as a powerful policy

instrument to anchor expectations and stabilize output and inflation. However, QE

interventions come with strong side effects on inequality and welfare. Estimation of the

model reveals that QE greatly dampened the U.S. Great Recession.

CEMAP Seminar Series: Vincent Sterk, University College London

Wednesday, 29 May 2019
13:00 to 14:00
Vincent Sterk,University College London
Durham University Business School, MHL 452

Title: QUANTITATIVE EASING

Abstract:

Is Quantitative Easing (QE) an effective substitute for conventional monetary policy?

We study this question using a heterogeneous-agents model with nominal rigidities,

as well as liquid and partially liquid wealth. The direct effect of QE is determined by

the difference in marginal propensities to consume out of the two types of wealth,

which is large according to empirical studies. QE, therefore, emerges as a powerful policy

instrument to anchor expectations and stabilize output and inflation. However, QE

interventions come with strong side effects on inequality and welfare. Estimation of the

model reveals that QE greatly dampened the U.S. Great Recession.