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.

Transparency of Monetary Policy in the Postcrisis World

2019 ◽  
pp. 286-334
Author(s):  
Nergiz Dincer ◽  
Barry Eichengreen ◽  
Petra Geraats
Keyword(s):  
Monetary Policy ◽  
Financial Crisis ◽  
Information Disclosure ◽  
Global Financial Crisis ◽  
Central Banks ◽  
Forward Guidance ◽  
Policy Tool ◽  
The Us ◽  
The Global Financial Crisis ◽  
Monetary Policy Transparency

This chapter analyzes whether and to what extent central banks have continued to be more transparent in their conduct of monetary policy in the postcrisis period. It presents a monetary policy transparency index, that measures the degree of information disclosure about various aspects of the policymaking process for 112 central banks from 1998 until 2015. Compared to previous research, the index has been updated, revised and refined to better capture developments since the global financial crisis, with and explicit focus on monetary policy, more emphasis on the timely disclosure of information, and greater granularity, including for forward guidance. The development and challenges of increasing monetary policy transparency are further analyzed in case studies of the European Central Bank, the US Federal Reserve and the Bank of England, which illustrate how these prominent central banks have deployed greater transparency as a policy tool in the aftermath of the financial crisis.

Conclusions

2017 ◽  
Author(s):  
Yilmaz Akyüz
Keyword(s):  
Monetary Policy ◽  
Financial Crisis ◽  
Interest Rates ◽  
Global Financial Crisis ◽  
Developing Economies ◽  
Quantitative Easing ◽  
Unconventional Monetary Policy ◽  
Advanced Economies ◽  
The Global Financial Crisis ◽  
Zero Bound

The preceding chapters have examined the deepened integration of emerging and developing economies (EDEs) into the international financial system in the new millennium and their changing vulnerabilities to external financial shocks. They have discussed the role that policies in advanced economies played in this process, including those that culminated in the global financial crisis and the unconventional monetary policy of zero-bound interest rates and quantitative easing adopted in response to the crisis, as well as policies in EDEs themselves....

scholarly journals Comparison of the Approach of the Czech National Bank and the European Central Bank to the Effects of the Global Financial Crisis

2021 ◽  
Vol 10 (2) ◽  
pp. 18-46
Author(s):  
Andrea Cecrdlova
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Financial Crisis ◽  
Central Bank ◽  
European Central Bank ◽  
Global Financial Crisis ◽  
Central Banks ◽  
European Central ◽  
National Bank ◽  
The Global Financial Crisis

The latest global crisis, which fully erupted in 2008, can have a significant impact on central banks credibility in the long run. During the last crisis, monetary authorities encountered zero interest rate levels and, as a result, started to use non-standard monetary policy instruments. The Czech National Bank decided to use a less standard instrument in November 2013, when it started to intervene on the foreign exchange market in order to keep the Czech currency at level 27 CZK / EUR. However, the European Central Bank also adopted a non-standard instrument, when chose a path of quantitative easing in 2015 in order to support the euro area economy by purchasing financial assets. The question remains whether the approach of Czech National Bank or the approach of European Central Bank in the crisis and post-crisis period was a more appropriate alternative. With the passage of time from the global financial crisis, it is already possible to compare the approaches of these two central banks and at least partially assess what approach was more appropriate under the given conditions. When comparing the central banks approaches to the crisis, the Czech National Bank was better, both in terms of the rate of interest rate cuts and the resulting inflation with regard to the choice of a non-standard monetary policy instrument. The recent financial crisis has revealed the application of moral hazard in practice, both on behalf of the European Central Bank and the Czech National Bank, which may have a significant impact on their credibility and independence in the coming years.

ARE MAJOR CENTRAL BANKS BLINDED BY THE ANALYTICAL ELEGANCE OF THEIR MODELS? POSSIBLE COSTS OF UNCONVENTIONAL MONETARY POLICY MEASURES

2017 ◽  
Vol 62 (01) ◽  
pp. 87-108 ◽  
Author(s):  
PIOTR CIŻKOWICZ ◽  
ANDRZEJ RZOŃCAZ
Keyword(s):  
Monetary Policy ◽  
Global Financial Crisis ◽  
Significant Risk ◽  
Central Banks ◽  
New Keynesian ◽  
New Keynesian Model ◽  
Unconventional Monetary Policy ◽  
Keynesian Model ◽  
Policy Measures ◽  
The Global Financial Crisis

We survey the possible costs of the unconventional monetary policy measures undertaken by major central banks after the outbreak of the global financial crisis in 2008. We argue that these costs are not easily discernable in the new Keynesian (NK) model, which defines a theoretical framework for monetary policy. First, the costs may result from the effects of unconventional monetary policy measures on the intensity of restructuring and the persistence of uncertainty (which increased after the outbreak of the crisis). However, neither of these processes is considered in the new Keynesian model. Second, costs may be generated not only by distortions in the choices made by economic agents but may also be a result of the decisions made by governments, particularly in terms of the fiscal deficit level. However, the new Keynesian model does not consider the effects of unconventional monetary policy measures on the quality of fiscal policy. Without carefully considering the costs, there is a significant risk that unconventional monetary policy measures could become a conventional response to recurrent crises.

UNCONVENTIONAL MONETARY POLICY AND A MODERN VIEW ON CASH ISSUES

2020 ◽  
Vol 5 (10) ◽  
pp. 15-21
Author(s):  
Ch. A. GOGICHAEV ◽  
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Money Supply ◽  
Global Financial Crisis ◽  
Developed Countries ◽  
Central Banks ◽  
Unconventional Monetary Policy ◽  
Abnormal Growth ◽  
Excess Reserves ◽  
Close Relationship

In the aftermath of the 2008 global financial crisis, central banks in developed countries began to resort to unconventional monetary policy measures as interest rates approached zero. Such actions have led to the expansion of the balance sheets of central banks due to the abnormal growth of excess reserves. The article discusses the misconception that such an increase in the monetary base can directly affect the volume of money supply through the action of the money multiplier mechanism and the narrow credit channel of the transmission mechanism. The opinion disputed that non-traditional measures of monetary policy, pro-vided they are adequate, lead to an increase in inflationary risks in the economy. The work focuses on the lack of a close relationship between reserves, the level of lending and the money supply, and attempts made to assess the boundaries of the monetary policy methods under consideration.

scholarly journals Non-Standard Measures of the Monetary Policy – Mechanism for Overcoming Problems in the Implementation of the Neoliberal Concept of Monetary Policy During a Financial Crisis

2017 ◽  
Vol 55 (4) ◽  
pp. 465-480
Author(s):  
Andriana Milošević ◽  
Mirjana Jemović
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Financial Crisis ◽  
Global Financial Crisis ◽  
Policy Instruments ◽  
Developed Countries ◽  
Central Banks ◽  
Liquidity Provision

AbstractAfter multiple decreases in the reference interest rate and its reaching zero bounds in certain countries during the recent global financial crisis, central banks in developed countries have started applying non-standard measures of monetary policy. This does not refer to introducing new monetary policy instruments, but rather to a certain relativisation within the framework of standard instruments, in terms of maturity of liquidity provision, collateral policy and counterparties. Therefore, the aim of this paper is to examine the role of non-standard measures of monetary policy as a mechanism for overcoming problems in the implementation of the neoliberal concept of monetary policy in the conditions of the financial crisis. The answer to this question is rather sensitive, considering the fact that the neoliberal concept was supported by the most developed countries, that is, in fact, their central banks were using non-standard instruments of monetary policy for the greatest part.

6. Origins of the global financial crisis

2016 ◽  
pp. 86-100
Author(s):  
John Goddard ◽  
John O. S. Wilson
Keyword(s):  
Financial Crisis ◽  
Federal Reserve ◽  
Global Financial Crisis ◽  
Central Banks ◽  
Asian Financial Crisis ◽  
Savings And Loans ◽  
Macroeconomic Imbalances ◽  
The Us ◽  
To Come ◽  
The Global Financial Crisis

The 2007–09 global financial crisis is widely considered to have been the most severe crisis since the 1930s Great Depression. During the two decades prior to the global financial crisis, localized banking or financial crises occurred in many different countries that contained warnings of the upheaval that was to come. ‘Origins of the global financial crisis’ describes some of these: the Japanese and Swedish banking crises beginning in 1990 and 1991 respectively, the US Savings and Loans crisis, and the Asian financial crisis. It then considers the causes of the 2007–09 crisis, including global macroeconomic imbalances and policy mistakes committed by the Federal Reserve and the central banks of other deficit countries.

Monetary Policy of Central Banks during Global Financial Crisis

2010 ◽  
pp. 69-87
Author(s):  
S. Andryushin ◽  
V. Kuznetsova
Keyword(s):  
Monetary Policy ◽  
Financial Crisis ◽  
Statistical Data ◽  
Global Financial Crisis ◽  
Central Banks ◽  
Balance Sheets ◽  
Macroeconomic Conditions ◽  
Bank Of China ◽  
Bank Of England ◽  
The Global Financial Crisis

The paper analyzes different regimes of monetary policy, which central banks realized in normal macroeconomic conditions, summarizes their pluses and minuses. During the global financial crisis central banks had to conduct unconventional measures of monetary policy. Their realization has changed the structure and values of central banks balance sheets that is shown on the example of statistical data of FRS, Bank of England, ECB, Bundesbank, Bank of Japan, Peoples Bank of China.

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