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ECB Asset Purchase Programs Raise Inflation Expectations in the Euro Area

Author

Listed:
  • Malte Rieth
  • Lisa Gehrt

Abstract

Facing deflationary threats, the ECB has engaged in several forms of asset purchase programs to fulfill its mandate of maintaining price stability. A main objective of these programs is raising inflation expectations, as these are a main determinant of actual inflation. This study empirically evaluates the effectiveness of these ECB policies in raisinginflation expectations. The results suggest that the ECB announcements of asset purchase programs significantly increased the expected inflation in the euro area, albeit to a quantitatively modest extent. All in all, inflation expectations were raised by 20 to 30 basis points.

Suggested Citation

  • Malte Rieth & Lisa Gehrt, 2016. "ECB Asset Purchase Programs Raise Inflation Expectations in the Euro Area," DIW Economic Bulletin, DIW Berlin, German Institute for Economic Research, vol. 6(38), pages 463-469.
    • Handle: RePEc:diw:diwdeb:2016-38-1
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    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.542880.de/diw_econ_bull_2016-38-1.pdf
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    Citations

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    Cited by:

    1. Antal, Mark & Kaszab, Lorant, 2022. "Spillovers from the European Central Bank's asset purchases to countries in Central and Eastern Europe," Economic Modelling, Elsevier, vol. 113(C).
    2. Mark Antal & Lorant Kaszab, 2021. "Spillover Effects of the European Central Bank's Expanded Asset Purchase Program to Non-eurozone Countries in Central and Eastern Europe," MNB Occasional Papers 2021/140, Magyar Nemzeti Bank (Central Bank of Hungary).
    3. Aßhoff, Sina & Belke, Ansgar & Osowski, Thomas, 2021. "Unconventional monetary policy and inflation expectations in the Euro area," Economic Modelling, Elsevier, vol. 102(C).

    More about this item

    Keywords

    monetary policy; transmission; euro area; regression analysis;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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