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What are the macroeconomic effects of asset purchases?

Research output: Contribution to journalArticle

Martin Weale, Tomasz Wieladek

Original languageEnglish
Pages (from-to)81-93
Number of pages14
JournalJOURNAL OF MONETARY ECONOMICS
Volume79
Early online date13 Apr 2016
DOIs
Publication statusPublished - May 2016

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Abstract

The impact of announcements of large-scale purchases of government bonds on real GDP and the CPI in the United Kingdom and the United States is explored with a Bayesian VAR, estimated on monthly data from 2009M3 to 2014M5. Four different identification schemes are used, all leaving the reactions of GDP and CPI unrestricted, and the transmission channels of the policy are examined. An asset purchase announcement of 1% of GDP leads to a statistically significant rise of 0.58% (0.25%) and 0.62% (0.32%) rise in real GDP and CPI for the US (UK). The transmission channels differ in the two countries.

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