Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/191250
Authors: 
Hollmayr, Josef
Kühl, Michael
Year of Publication: 
2018
Series/Report no.: 
Bundesbank Discussion Paper 50/2018
Abstract: 
This paper analyzes the monetary-fiscal interaction if the central bank conducts quantitative easing. Although asset purchases have similar effects on the real economy under monetary and fiscal dominance, wealth effects yield a qualitatively different response on the rate of inflation. Our results show that under fiscal dominance, unconventional monetary policy has similar effects to conventional monetary policy on inflation because these wealth effects exert downward pressure on prices. The longer the average maturity, the more volatile is the transmission of quantitative easing to the real economy.
Subjects: 
Monetary Policy
Fiscal Policy
Asset Purchase Program
JEL: 
E32
E44
E62
ISBN: 
978-3-95729-529-3
Document Type: 
Working Paper
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