We take two approaches to examine the effect of the European Central Bank’s Quantitative Easing (QE) on the sovereign bonds of Ireland, Italy, Portugal, and Spain. First, outcomes of panel regression models show that QE lowered the effect of volatility on sovereign bond spreads by one to two...

Despite being an identity, the money multiplier (MM) is also a useful summary of the financial intermediation process as it can be interpreted as the rate of substitution between inside and outside money. By modelling the supply and demand for inside and outside money, we provide this rate of...

We examine the effect of Quantitative Easing (QE) by the ECB on the sovereign bond risks of Italy, Ireland, Spain and Portugal. First, outcomes of panel regression models suggest that QE lowered the effect of volatility on sovereign bond spreads by 1 to 2 percentage points. Compared to asset...