The research question relates to the quantitative impact of government bond purchases of the European Central Bank on inflation and other economic variables at the zero lower bound. At the core is a standard New Keynesian Dynamic Stochastic General Equilibrium model with several financial...

This study examines the problem that a central bank may face after exiting a monetary quantitative easing policy. It develops a simple dynamic optimization model of a central bank, which finds that if the bank needs to absorb a substantial amount of excess reserves when exiting, the monetary...

Though unconventional monetary policy is still new, already there is a conventional wisdom that the impact of monetary policy is related to the composition of the asset mix. This turns out to be incomplete and potentially misleading. In this paper, we find more complex effects on bank lending...