Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/172945
Authors: 
Clemens, Marius
Gebauer, Stefan
Rieth, Malte
Year of Publication: 
2017
Citation: 
[Journal:] DIW Economic Bulletin [ISSN:] 2192-7219 [Volume:] 7 [Year:] 2017 [Issue:] 49 [Pages:] 533-540
Abstract: 
The European Central Bank is planning a gradual reduction of government bond purchases under the asset purchase program it initiated in 2015. The present study by the German Institute for Economic Research analyzes the potential macroeconomic implications of different exit strategies. The authors examined the potential effects of a reduction in net purchase volume, an early exit, and a faster exit from the program on output and inflation in the euro area. Model simulations showed that economic growth and inflation rates would decrease in all three scenarios. However, the effects of the scenario with reduced asset purchases are less severe than those of an exit from the program that is earlier or faster than expected. In particular, an early exit from the program should significantly affect inflation rates, an effect that the European Central Bank should factor into its decision-making process.
Subjects: 
Tapering
Quantitative Easing
Monetary Policy
JEL: 
E4
E52
E58
Document Type: 
Article

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