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dc.contributor.authorChen, Hanen_US
dc.contributor.authorCúrdia, Vascoen_US
dc.contributor.authorFerrero, Andreaen_US
dc.date.accessioned2012-01-16en_US
dc.date.accessioned2012-08-17T14:38:46Z-
dc.date.available2012-08-17T14:38:46Z-
dc.date.issued2011en_US
dc.identifier.urihttp://hdl.handle.net/10419/60970-
dc.description.abstractThe effects of asset purchase programs on macroeconomic variables are likely to be moderate. We reach this conclusion after simulating the impact of the Federal Reserve's second large-scale asset purchase program (LSAP II) in a DSGE model enriched with a preferred habitat framework and estimated on U.S. data. Our simulations suggest that such a program increases GDP growth by less than half a percentage point, although the effect on the level of GDP is very persistent. The program's marginal contribution to inflation is very small. One key reason for our findings is that we estimate a small degree of financial market segmentation. If we enrich the set of observables with a measure of long-term debt, the semi-elasticity of the risk premium to the amount of debt in private-sector hands is substantially smaller than that reported in the recent empirical literature. In this case, our baseline estimates of the effects of LSAP II on the macroeconomy decrease by at least a factor of two. Throughout the analysis, a commitment to an extended period at the zero lower bound for nominal interest rates increases the effects of asset purchase programs on GDP growth and inflation.en_US
dc.language.isoengen_US
dc.publisherFederal Reserve Bank of New York New York, NYen_US
dc.relation.ispartofseriesStaff Report, Federal Reserve Bank of New York 527en_US
dc.subject.jelE43en_US
dc.subject.jelE44en_US
dc.subject.jelE52en_US
dc.subject.jelE58en_US
dc.subject.ddc330en_US
dc.subject.keywordquantitative easingen_US
dc.subject.keywordzero lower bounden_US
dc.subject.keywordunconventional monetary policyen_US
dc.titleThe macroeconomic effects of large-scale asset purchase programsen_US
dc.typeWorking Paperen_US
dc.identifier.ppn683148435en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:Staff Reports, Federal Reserve Bank of New York

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