Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/225639
Authors: 
Martínez-Hernández, Catalina
Year of Publication: 
2020
Series/Report no.: 
Diskussionsbeiträge 2020/18
Abstract: 
The European Central Bank (ECB) has adopted a mixture of conventional and unconventional tools in order to achieve its mandate of price stability in the current low-inflation, low-interest-rate scenario. This paper contributes to the existing literature by providing a taxonomy of the ECB's policy toolkit and by evaluating its implications on price stability and the anchoring of inflation expectations. I carry out my analysis based on a high-frequency identification and the estimation of a large Bayesian Vector Autoregression. I find evidence of re-anchored expectations as response to quantitative easing and forward guidance, i.e. forecasters revise their long-run expectations upwards. Consequently, inflation increases, which stresses the crucial role of expectations for the transmission of monetary policy.
Subjects: 
Inflation Expectations
Monetary Policy
Large BVAR
High-frequency identification
JEL: 
E52
C55
C11
C32
E31
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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