IDEAS home Printed from https://ideas.repec.org/a/eee/eecrev/v161y2024ics0014292123001976.html
   My bibliography  Save this article

Wall street QE vs. main street lending: A comment

Author

Listed:
  • Mendicino, Caterina

Abstract

Are direct lending to non-financial firms (Main Street Lending) and asset pur- chases (Wall Street QE) substitute or complementary policies? Which financial frictions are most effectively addressed by each of them? The paper by Cardamone et al. (2023) addresses these questions by contrasting the effectiveness of central bank asset purchases and direct lending to non-financial corporations through the lens of a tractable macro-banking model. Their results show that Main Street Lending is highly stimulative for COVID-19 type recessions which are characterized by significant cash flow shortages for non-financial firms. Wall Street QE is instead only effective in recessions featuring an impairment of the balance sheet of financial intermediaries, such as the 2007–2009 Great recession.

Suggested Citation

  • Mendicino, Caterina, 2024. "Wall street QE vs. main street lending: A comment," European Economic Review, Elsevier, vol. 161(C).
    • Handle: RePEc:eee:eecrev:v:161:y:2024:i:c:s0014292123001976
    DOI: 10.1016/j.euroecorev.2023.104569
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0014292123001976
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.euroecorev.2023.104569?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Unconventional monetary policy; Financial frictions; DSGE;
    All these keywords.

    JEL classification:

    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F38 - International Economics - - International Finance - - - International Financial Policy: Financial Transactions Tax; Capital Controls
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eecrev:v:161:y:2024:i:c:s0014292123001976. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eer .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.