Post Crisis Unconventional Monetary Policy in the UK, the US, and the EA

2016 ◽  
Author(s):  
Mahmoud Fatouh
Keyword(s):  
Monetary Policy ◽  
Unconventional Monetary Policy ◽  
The Us ◽  
The Uk

scholarly journals The Spillover Effects of the US Unconventional Monetary Policy: New Evidence from Asian Developing Countries

2020 ◽  
Vol 13 (8) ◽  
pp. 165
Author(s):  
Thi Tran ◽  
Hoang Pham
Keyword(s):  
Developing Countries ◽  
Monetary Policy ◽  
Interest Rates ◽  
Spillover Effects ◽  
Unconventional Monetary Policy ◽  
Equity Prices ◽  
Developing Markets ◽  
The Us ◽  
Asian Developing Countries

This paper aims to trace the monthly responses of equity prices, long-term interest rates, and exchange rates in Asian developing markets to the US unconventional monetary policy (UMP). The main research question is to explore whether UMP shocks exist in those markets. We also consider the differences in the mean responses of those asset prices between traditional and non-traditional monetary policy phases. To address such concerns, we employ a panel vector autoregression with exogenous variables (Panel VARX) model and estimate the model by the least-squares dummy variable (LSDV) estimator in three different periods spanning from 2004M2 to 2018M4. The first finding is that UMP shocks from the US are associated with a surge in equity prices, a decline in long-term interest rates, and an appreciation of currencies in Asian developing markets. In contrast, the conventional monetary policy shocks from the US seem to exert adverse effects on these recipient countries. These empirical results suggest that the policymakers in Asian developing countries should cautiously take into account the spillover effects from the US unconventional monetary policy once it is executed.

scholarly journals Central banks’ voting contest

2020 ◽  
Author(s):  
Wojciech Charemza
Keyword(s):  
Monetary Policy ◽  
Federal Reserve ◽  
Activity Index ◽  
Selection Criterion ◽  
Central Banks ◽  
Decision Function ◽  
The Us ◽  
Dynamic Simulation Model ◽  
Voting Decisions ◽  
The Uk

This chapter compares how effective different voting algorithms are for the decisions taken by monetary policy councils. A voting activity index is proposed and computed as the ratio of the number of all possible decisions to the total number of different combinations of decisions available to a given composition of an MPC. The voting systems considered are these used by the US Federal Reserve Board and the central banks of the UK, Australia, Canada, Sweden and Poland. In the dynamic simulation model, which emulates voting decisions, the heterogeneous agents act upon individual forecast signals and optimise a Taylor-like decision function. The selection criterion is based on the simulated probability of staying within the bounds that define the inflationary target. The general conclusion is that the voting algorithm used by the Bank of Sweden is the best given the criteria applied, especially when inflation is initially outside the target bounds. It is observed that a decrease in inflation forecast uncertainty, which is inversely proportional to the correlation between the forecast signals delivered to members of the monetary policy board, makes the voting less effective.

scholarly journals Spillovers of US unconventional monetary policy: quantitative easing, spreads, and international financial markets

2021 ◽  
Vol 7 (1) ◽  
Author(s):  
Zekeriya Yildirim ◽  
Mehmet Ivrendi
Keyword(s):  
Monetary Policy ◽  
Financial Markets ◽  
Risk Taking ◽  
Large Scale ◽  
Emerging Market ◽  
Spillover Effects ◽  
International Financial Markets ◽  
Quantitative Easing ◽  
Unconventional Monetary Policy ◽  
The Us

AbstractThis study investigates the international spillover effects of US unconventional monetary policy (UMP)—frequently called large-scale asset purchases or quantitative easing (QE)—on advanced and emerging market economies, using structural vector autoregressive models with high-frequency daily data. Blinder (Federal Reserve Bank of St. Louis Rev 92(6): 465–479, 2010) argued that the QE measures primarily aim to reduce US interest rate spreads, such as term and risk premiums. Considering this argument and recent empirical evidence, we use two spreads as indicators of US UMP: the mortgage and term spreads. Based on data from 20 emerging and 20 advanced countries, our empirical findings reveal that US unconventional monetary policies significantly affect financial conditions in emerging and advanced countries by altering the risk-taking behavior of investors. This result suggests that the risk-taking channel plays an important role in transmitting the effects of these policies to the rest of the world. The extent of these effects depends on the type of QE measures. QE measures such as purchases of private sector securities that lower the US mortgage spread exert stronger and more significant spillover effects on international financial markets than those that reduce the US term spread. Furthermore, the estimated financial spillovers vary substantially across countries and between and within the emerging and advanced countries that we examine in this study.

Fed’s Unconventional Monetary Policy and Risk Spillover in the US Financial Markets

2019 ◽  
Author(s):  
Mehmet Balcilar ◽  
Zeynel Abidin Ozdemir ◽  
Huseyin Ozdemir ◽  
Mark E. Wohar
Keyword(s):  
Monetary Policy ◽  
Financial Markets ◽  
Unconventional Monetary Policy ◽  
The Us

scholarly journals Modeling Outcomes of Unconventional Monetary Policy

2019 ◽  
Vol 8 (4) ◽  
pp. 10263-10268
Keyword(s):  
Monetary Policy ◽  
Financial Crisis ◽  
Global Financial Crisis ◽  
Consumer Price Index ◽  
Developed Countries ◽  
Central Banks ◽  
Unconventional Monetary Policy ◽  
The Us ◽  
The Developed Countries ◽  
The Global Financial Crisis

The paper presents a study of the outcomes of the unconventional monetary policy methods that the central banks of developed countries have been applying during and after the global financial crisis. Before the crisis central banks used the interest rate policy as their main tool. But the recent financial crisis has demonstrated the inefficiency of traditional methods (especially after the base interest rate has reached zero). Therefore in response to the global financial crisis, central banks of many countries have taken unconventional measures to overcome the crisis. The paper aims to study the main outcomes of unconventional monetary policy measures of the developed countries and formulate the recommendations for the developing countries. The following objectives are being met in the paper:to reveal the essence of the main mechanisms for implementing the unconventional monetary policy; to evaluate the efficiency of unconventional monetary policy in the US, Japan, United Kingdom;to model the impact of monetary policy of the European Central bank on the consumer price index in the Eurozone countries. Research methods: method of comparative analysis is usedto evaluate the efficiency of the unconventional monetary policy in the US, Japan, European Union and the United Kingdom.The model of themonetary policy impact on the consumer price index is based on econometric analysis and is constructed using the least squares method. The studied model includes both traditional and non-traditional methods.Observation period - quarterly data from 1999 to the second quarter of 2019. The results of the analysis show that unconventional monetary policy methods of the central banks of the developed countries reached major goals - to prevent bankruptcies of large financial institutions in national economies. Moreover, the results of the suggested model show that the European Central Bank policy has also reached its inflation target that supposed to stimulate economic growth; the most significant effect is observed in the first years after the launch of an unconventional monetary policy. At the same time the unconventional tools of monetary policy stimulate the extreme increase of the securities prices, which led to the “overheating” of the US stock market and the EU national bonds markets with the negative yield on government securities of several countries, which may become a trigger for a new global crisis in the future. The result of the analysis of monetary policy in Ukraine shows the limitations of the use of non-traditional measures for the developing countries.

scholarly journals Does monetary policy in advanced economies have differentiated effects on portfolio flows to emerging economies?

2020 ◽  
Vol 2 (3) ◽  
pp. 25-70
Author(s):  
Marco Hernandez
Keyword(s):  
Monetary Policy ◽  
Euro Area ◽  
Emerging Economies ◽  
Foreign Portfolio Investment ◽  
Portfolio Flows ◽  
Advanced Economies ◽  
The Us ◽  
The Uk ◽  
Us Monetary Policy ◽  
Differentiated Effects

This work analyzes whether the monetary policy in advanced economies (the US, the euro area, and the UK) had differentiated effects on portfolio flows from these countries toward EMEs. The results show the following: First, US monetary policy had a bigger impact on bond and equity investment to EMEs than the euro area or UK monetary policy. Second, investors' response to US monetary policy was mostly homogeneous. Among EMEs regions, foreign portfolio investment to Emerging Europe and Latin America was more volatile that than to Emerging Asia, probably because other factors such as investors' preference (in the case of bond flows) or expectations of firms' profits (in the case of equity flows) could play an important role in investors' decisions. These results could be useful for policymakers from EMEs as a benchmark to anticipate differentiated effects in portfolio flows caused by advanced economies' monetary policy.

scholarly journals Brexit and new perspectives of an unconventional way of Eurozone revival

2019 ◽  
Vol 8 (3) ◽  
pp. 5-20 ◽  
Author(s):  
Nikolaos A. Kyriazis ◽  
Emmanouil M. L. Economou
Keyword(s):  
Monetary Policy ◽  
Unconventional Monetary Policy ◽  
The European Union ◽  
Pros And Cons ◽  
The Uk ◽  
Near Future ◽  
New Phase ◽  
British People ◽  
The Eu ◽  
Made In

Abstract In the aftermath of the UK referendum on June 23rd, 2016 that resulted in a sonorous negative decision regarding the willingness of the British people to remain in the EU, a significant number of alarming questions have emerged. Although Europe should have forged in crises, nowadays, many compromises have to be made in order to maintain the European construction as intact as possible. The question we attempt to answer is whether a new phase of unconventional monetary policy in the form of QE would be appropriate to lessen the threat of an upcoming crisis. This is why we examine Eurozone QE perspectives through the prism of the new EU era without the UK in order to highlight the pros and cons of the historical Brexit decision. As new rounds of unconventional monetary policy are believed to be essential for supporting the weaker countries in the European south, perspectives of non-conventional success could alter and optimal policies be substantially reformulated subject to the newly-arising constraints. Based on the main scenarios about the UK’s relations to the European Union in the near future, we estimate how a new round of non-conventional measures could affect the Britons as well as the European citizens. Moreover, we try to assess the viability of each of these outcomes through the spectrum of a monetary-driven decision-making.

Internalizing Discipline

2020 ◽  
pp. 193-231
Author(s):  
Jeremy Green
Keyword(s):  
New York ◽  
Monetary Policy ◽  
Financial Integration ◽  
Ronald Reagan ◽  
The Us ◽  
Anglo American ◽  
The Uk ◽  
City Of London ◽  
The City ◽  
Further Development

This chapter argues that the radicalization of monetary policy, regulatory transformation, and central bank innovation in the US and the UK emerged out of institutional complementarities and interdependencies generated by Anglo-American development. The development of offshore markets in the City of London led bankers on both sides of the Atlantic to push for further domestic liberalization, as competition between London and New York intensified. US banks pressured regulators to replicate the City's offshore conditions, which gradually eroded New Deal-era financial regulations. These dynamics, alongside the Fed's failure to regulate the Euromarkets, demonstrated both the limits on US monetary policy autonomy and the importance of the transatlantic impetus to liberalization emerging from Anglo-American financial integration. Embracing monetarism, Margaret Thatcher and Ronald Reagan made clear that price stability would be restored and that working-class solidarity would be broken. In the absence of the Bretton Woods framework, both states demonstrated their commitment to internalizing discipline through extreme applications of monetary policy and direct confrontations with the labor movement. Ultimately, developments in the UK and the US led the way for the broader adoption of neoliberalism within the global political economy and the further development of financialization.

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