Advanced

Quantitative Easing in the Eurozone

Loonstra, Marco John Jan LU (2017) EKHM52 20171
Department of Economic History
Abstract
In response to the outbreak Global Financial Crisis and European Debt Crisis, major central banks took very accommodative monetary policy stances. By slashing interest rates to the zero-lower bound and introducing unconventional monetary policy in the form of quantitative easing they hoped to boost aggregate demand and inflation. This paper investigates the workings of QE, money creation, potential macroeconomic- and other side-effects- of the ECB’s QE programme: “the expanded asset purchasing programme”, and its transmission channels. Though it seems that QE mainly works through portfolio rebalancing, limited evidence has been found on real macroeconomic effects and negative side-effects such as asset bubble inflation. This puts the... (More)
In response to the outbreak Global Financial Crisis and European Debt Crisis, major central banks took very accommodative monetary policy stances. By slashing interest rates to the zero-lower bound and introducing unconventional monetary policy in the form of quantitative easing they hoped to boost aggregate demand and inflation. This paper investigates the workings of QE, money creation, potential macroeconomic- and other side-effects- of the ECB’s QE programme: “the expanded asset purchasing programme”, and its transmission channels. Though it seems that QE mainly works through portfolio rebalancing, limited evidence has been found on real macroeconomic effects and negative side-effects such as asset bubble inflation. This puts the effectiveness of the ECB’s APP into question. (Less)
Please use this url to cite or link to this publication:
author
Loonstra, Marco John Jan LU
supervisor
organization
course
EKHM52 20171
year
type
H2 - Master's Degree (Two Years)
subject
keywords
money creation, unconventional monetary policy, Eurozone, macroeconomy
language
English
id
8917060
date added to LUP
2017-06-21 08:44:03
date last changed
2017-06-21 08:44:03
@misc{8917060,
  abstract     = {In response to the outbreak Global Financial Crisis and European Debt Crisis, major central banks took very accommodative monetary policy stances. By slashing interest rates to the zero-lower bound and introducing unconventional monetary policy in the form of quantitative easing they hoped to boost aggregate demand and inflation. This paper investigates the workings of QE, money creation, potential macroeconomic- and other side-effects- of the ECB’s QE programme: “the expanded asset purchasing programme”, and its transmission channels. Though it seems that QE mainly works through portfolio rebalancing, limited evidence has been found on real macroeconomic effects and negative side-effects such as asset bubble inflation. This puts the effectiveness of the ECB’s APP into question.},
  author       = {Loonstra, Marco John Jan},
  keyword      = {money creation,unconventional monetary policy,Eurozone,macroeconomy},
  language     = {eng},
  note         = {Student Paper},
  title        = {Quantitative Easing in the Eurozone},
  year         = {2017},
}