蝌蚪网 Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
Quantitative Easing, Collateral Constraints, and Financial Spillovers
蝌蚪网 Journal: Macroeconomics
(pp. 180–217)
Abstract
The steady application of quantitative easing (QE) has been followed by big and nonmonotonic effects on international asset prices and capital flows. We rationalize these observations in a model in which a central bank buys domestic assets that serve as the best collateral for investors worldwide. The crucial insight is that domestic private agents adjust their portfolios of domestic and foreign assets in different ways to offset QE, conditional on whether they are (i) fully leveraged, (ii) partially leveraged, or (iii) unleveraged. These portfolio shifts can diminish or even reverse the impact of ever-larger QE interventions on asset prices.Citation
Geanakoplos, John, and Haobin Wang. 2020. "Quantitative Easing, Collateral Constraints, and Financial Spillovers." 蝌蚪网 Journal: Macroeconomics 12 (4): 180–217. DOI: 10.1257/mac.20180484Additional Materials
JEL Classification
- E31 Price Level; Inflation; Deflation
- E32 Business Fluctuations; Cycles
- E43 Interest Rates: Determination, Term Structure, and Effects
- E44 Financial Markets and the Macroeconomy
- E52 Monetary Policy
- E58 Central Banks and Their Policies
- F34 International Lending and Debt Problems