Monetary Policy in Exceptional Times

By M. Lenza, H. Pill, L. Reichlin. Social Science Research Network, 2012

406 citations recorded by the source corpus.

This paper describes the way in which the European Central Bank (ECB), the Federal Reserve and the Bank of England conducted monetary policy since the beginning of the financial crisis, in August 2007. We argue that both quantitative easing - and the other non-standard measures introduced by central banks that changed the composition of the asset side of their balance sheets (so-called "qualitative easing") - acted mainly through their effects on interest rates and, in particular, on money market spreads, rather than solely through "quantity effects" in terms of the money supply. We perform a quantitative exercise on the euro area which estimates the effect of the reduction of these spreads to the broader economy.

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/dbaf1dba2f4ba5ae4640b441f679cac36cbcd2e3

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Citations in the corpus

Evaluating the impact of unconventional monetary policy measures: Empirical evidence from the ECB׳s Securities Markets Programme (2016, background): “…eligible collateral, foreign exchange swap lines, longerterm refinancing operations with maturities of up to three years, and purchases of covered bonds and government bonds within asset purchase programs, see Lenza, Pill, and Reichlin (2010) and Eser, Carmona Amaro, Iacobelli, and Rubens (2012).”
The ECB and the Interbank Market (2012, positive): “In previous work on the euro area (Lenza et al., 2010; Giannone et al., 2011), we have argued that another channel of transmission for non-standard monetary policy measures may be equally, if not more, important.”
Evaluating Asset-Market Effects of Unconventional Monetary Policy: A Cross-Country Comparison (2014, background): “These unconventional policies differ across central banks, but have many points in common (Lenza et al., 2010).”
Real Effects of Quantitative Easing at the Zero-Lower Bound: Structural VAR-Based Evidence from Japan (2011, methodology): “Using a Bayesian shrinkage VAR model, Lenza et al. (2010) report some significant effects of unconventional monetary shocks on macroeconomic variables in the Euro Area by means of a counterfactual analysis.”
The euro area interbank market and the liquidity management of the eurosystem in the financial crisis (2010, background): “Lenza, Pill, and Reichlin (2010) describe in detail the conduct monetary policy of the ECB, the Fed and the Bank of England.”
Effectiveness and Transmission of the ECB's Balance Sheet Policies (2014, positive): “4 Several empirical studies on unconventional monetary policy use data starting before the financial crisis, which may not be adequate to assess the effects of the policy measures that were taken in the aftermath of the financial crisis (e.g. Lenza et al. 2010; Giannone et al. 2012; Peersman 2011).”
Conditional Forecasts and Scenario Analysis with Vector Autoregressions for Large Cross-Sections (2015, background): “For recent examples of conditional forecasts, see Lenza, Pill, and Reichlin (2010); Giannone, Lenza, and Reichlin (2010); Jarociński and Smets (2008); Bloor and Matheson (2011); Giannone, Lenza, Pill, and Reichlin (2012); Stock and Watson (2012a); Baumeister and Kilian (2011); Giannone, Lenza,…”
Quantitative Easing and Unconventional Monetary Policy – an Introduction (2012, background): “One of the ﬁrst of these was by Lenza et al. (2010), who consider the effects of the ECB’s ﬁxed-rate full allotment policy, which allowed ﬁnancial institutions to obtain unlimited liquidity for extended periods.”
Macroprudential Policy - A Literature Review (2012, neutral): “…have recently attracted much attention in the policy debate and the research literature (e.g. Bernanke and Reinhart, 2004; Gertler and Karadi, 2009; Motto et al, 2009; Curdia and Woodford, 2009; Lenza et al, 2010), are confined to extreme situations where policy rates are close to the zero bound.”
The Impact of Monetary Policy on Inequality in the UK. An Empirical Analysis (2017, methodology): “However, given the short sample over which QE has been carried out and the subsequent di¢ culty of disentangling di⁄erent channels, recent studies on this issue have adopted this simple approach (see Lenza, Pill and Reichlin, 2010).”
Monetary policy and bank lending in a low interest rate environment: Diminishing effectiveness? (2017, positive): “As an example, Lenza et al (2010) find that quantitative easing – and the other non-standard measures introduced by central banks that changed the composition of the asset side of their balance 4 WP612 Monetary policy and bank lending in a low interest rate environment The impact would tend to…”
The ECB’s Non-Standard Monetary Policy Measures: The Role of Institutional Factors and Financial Structure (2012, neutral): “13 See for instance Fahr et al. (2011), Giannone et al. (2011), Lenza et al. (2010) and ECB (2011b).”
Evaluating asset-market effects of unconventional monetary policy: a multi-country review (2014, neutral): “These unconventional policies differ across central banks, but have many points in common (Lenza et al., 2010).”