Abstract
This paper attempts to consider large-scale asset purchases in a historical and more general perspective. Part of QE is effectively about absorbing financial
market risk through the Federal Reserve's balance sheet and this has been seen previously (operation Twist). I find that an unexpected increase in the relative duration of the Federal Reserve's assets (risk share) have plausible real effects:
Improvement in (un)employment, output, and housing activity, inflation increases. Credit spreads shrink, lending activity improves and financial market volatility is lowered.
market risk through the Federal Reserve's balance sheet and this has been seen previously (operation Twist). I find that an unexpected increase in the relative duration of the Federal Reserve's assets (risk share) have plausible real effects:
Improvement in (un)employment, output, and housing activity, inflation increases. Credit spreads shrink, lending activity improves and financial market volatility is lowered.
| Originalsprog | Engelsk |
|---|---|
| Titel | Empirical Monetary Economics Workshop, OCFE, Paris, December 2015 |
| Publikationsdato | 2015 |
| Status | Udgivet - 2015 |