Fed Asset Buying and Private Borrowing Rates
Citations
623 citations
64 citations
Cites background from "Fed Asset Buying and Private Borrow..."
...Something similar may be taking place in the United States, as a study by Bauer (2012) points out....
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...The decline in effectiveness seems to be due to the disappearance of the credit easing aspect of the purchases as markets returned to normalcy and also due to the repeated use of other measures such as forward guidance to lower interest rates (Bauer 2012)....
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...Bauer (2012) argues that large-scale asset purchases, by sending the signal that the central bank will continue to be aggressive in monetary easing in the future, also entail an element of forward guidance—a signaling effect....
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58 citations
Cites background from "Fed Asset Buying and Private Borrow..."
...(2011); Bauer (2012); Willians (2011))....
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...Other papers survey the literature from a policy perspective (Bauer, 2012; Willians, 2011)....
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28 citations
Cites background from "Fed Asset Buying and Private Borrow..."
...3 Bauer (2012) argues that large-scale asset purchases or QE0, by sending a signal that the central bank will continue to be aggressive in monetary easing in the future, also entails an element of forward guidance – a signaling effect....
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References
1,116 citations
"Fed Asset Buying and Private Borrow..." refers background in this paper
...Unconventional monetary policy actions can only be successful in stimulating the economy if they lower the interest rates that matter most for businesses and households, that is, the private borrowing rates that determine the cost of funds for the private sector....
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...Krishnamurthy and Vissing-Jorgensen (2011) identify the key QE2 announcement dates, excluding Chairman Bernanke’s speech on August 27 because interest rates increased strongly that day due to other news....
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772 citations
"Fed Asset Buying and Private Borrow..." refers background in this paper
...To quantify the effects of LSAPs on interest rates, one possible approach is to focus on rate changes on days when the Fed made key announcements about these programs, since markets usually react immediately when the Fed signals future purchases (see Bauer and Rudebusch 2011 and Gagnon et al. 2011)....
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...Gagnon et al. (2011) and Krishnamurthy and VissingJorgensen (2011) documented similar effects on other MBS and corporate bond yields, confirming that the QE1 effects were large and widespread....
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...Notably, however, the link between rates on mortgage-backed securities and actual mortgage rates has weakened in the wake of the financial crisis....
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...Gagnon et al (2011) emphasize this channel for QE1....
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368 citations
"Fed Asset Buying and Private Borrow..." refers background in this paper
...Bauer and Rudebusch (2011) argue that this channel played an important role for QE1....
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...To quantify the effects of LSAPs on interest rates, one possible approach is to focus on rate changes on days when the Fed made key announcements about these programs, since markets usually react immediately when the Fed signals future purchases (see Bauer and Rudebusch 2011 and Gagnon et al. 2011)....
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...Notably, however, the link between rates on mortgage-backed securities and actual mortgage rates has weakened in the wake of the financial crisis....
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114 citations
"Fed Asset Buying and Private Borrow..." refers methods in this paper
...With the federal funds rate, the traditional policy tool of the Federal Reserve, effectively reaching zero in late 2008, policymakers have turned to unconventional policy tools to further ease the stance of monetary policy (Williams 2011)....
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23 citations