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Unconventional Monetary Policy in the USA and in Europe

  • Guerini MattiaEmail author
  • Lamperti Francesco
  • Mazzocchetti Andrea
Chapter

Abstract

Central banks reacted to the financial crisis through sets of unconventional monetary policies that encompass the use of market operations, forward guidance and negative interest rates. We discuss the phenomena that have characterized balance sheet-based policies in the USA and in the EU, and we relate the effects of these policies to the financial stability objective. Our interpretation of the available empirical evidence is that QE lowered long-term yields and eased credit conditions, but had only mild effects on macroeconomic fundamentals. Also, the recent tapering process might lead to potentially dangerous contingencies. Among them, we discuss the portfolio reallocation toward riskier stocks, the possibility of asset prices bubbles, a lower central bank independence and a reduced distance between monetary and fiscal policies.

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Copyright information

© The Author(s) 2019

Authors and Affiliations

  • Guerini Mattia
    • 1
    • 2
    • 3
    Email author
  • Lamperti Francesco
    • 3
    • 4
  • Mazzocchetti Andrea
    • 5
  1. 1.Université Côte d’Azur – GREDEGValbonneFrance
  2. 2.OFCE – SciencesPoParisFrance
  3. 3.Sant’Anna School of Advanced StudiesPisaItaly
  4. 4.European Institute of Economics and the EnvironmentMilanItaly
  5. 5.University of GenovaGenovaItaly

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