{"title":"Quantitative easing, macroeconomic stability and economic policy effectiveness","authors":"R. Cebula, F. Rossi","doi":"10.1108/jfep-06-2021-0149","DOIUrl":null,"url":null,"abstract":"\nPurpose\nThis study mathematically aims to evaluate the implications of a central bank’s adoption of a policy of quantitative easing (QE)/relative QE.\n\n\nDesign/methodology/approach\nIt is shown, within an investment-savings (IS)-liquidity preference-money supply (LM) framework, that this policy prerogative has, depending upon the aggressiveness which QE is undertaken, demonstrable implications for the conditions under which macroeconomic stability exists.\n\n\nFindings\nFurthermore, it is shown here that the presence of QE increases the effectiveness of traditional discretionary monetary and fiscal policies.\n\n\nOriginality/value\nThe study shows, within an IS-LM framework, that this policy prerogative has, depending upon the aggressiveness which QE is undertaken, demonstrable implications for the conditions under which macroeconomic stability exists.\n","PeriodicalId":45556,"journal":{"name":"Journal of Financial Economic Policy","volume":"1 1","pages":""},"PeriodicalIF":1.3000,"publicationDate":"2021-07-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"2","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Financial Economic Policy","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1108/jfep-06-2021-0149","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 2
Abstract
Purpose
This study mathematically aims to evaluate the implications of a central bank’s adoption of a policy of quantitative easing (QE)/relative QE.
Design/methodology/approach
It is shown, within an investment-savings (IS)-liquidity preference-money supply (LM) framework, that this policy prerogative has, depending upon the aggressiveness which QE is undertaken, demonstrable implications for the conditions under which macroeconomic stability exists.
Findings
Furthermore, it is shown here that the presence of QE increases the effectiveness of traditional discretionary monetary and fiscal policies.
Originality/value
The study shows, within an IS-LM framework, that this policy prerogative has, depending upon the aggressiveness which QE is undertaken, demonstrable implications for the conditions under which macroeconomic stability exists.
期刊介绍：
The Journal of Financial Economic Policy publishes high quality peer reviewed research on financial economic policy issues. The journal is devoted to the advancement of the understanding of the entire spectrum of financial policy and control issues and their interactions to economic phenomena. Economic and financial phenomena involve complex trade-offs and linkages between various types of risk factors and variables of interest to policy makers and market participants alike. Market participants such as economic policy makers, regulators, banking and competition supervisors, corporations and financial institutions, require timely and robust answers to the contemporary and emerging policy questions. In turn, such answers require thorough input by the academics, policy makers and practitioners alike. The Journal of Financial Economic Policy provides the forum to satisfy this need. The journal publishes and invites concise papers to enable a prompt response to current and emerging policy affairs.
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