Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/50597 
Year of Publication: 
2011
Series/Report no.: 
School of Economics Discussion Papers No. 11,09
Publisher: 
University of Kent, School of Economics, Canterbury
Abstract: 
We assess recent developments in monetary policy practice following the financial crisis drawing on papers from a specially convened conference in March 2010. In particular, we consider why central banks throughout the world have injected substantial quantities of liquidity into the financial system and seen their balance sheets expand to multiples of GDP. We outline the rationale for balance sheet operations: (i) portfolio balance of the non-bank financial sector; (ii) an offset for the zero bound; (iii) signalling mechanism about medium term inflation expectations and (iv) the alleviation of the government's budget constraint. We briefly outline the recent experience with QE and draw a distinction between liquidity and macroeconomic stabilisation operations.
Subjects: 
zero bound
open-market operations
quantitative easing
monetary policy
JEL: 
E31
E40
E51
Document Type: 
Working Paper

Files in This Item:
File
Size
437.55 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.