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What can the money data tell us about the impact of QE?

Author

Listed:
  • Butt, Nicholas

    () (Bank of England)

  • Domit, Silvia

    () (Bank of England)

  • McLeay, Michael

    () (Bank of England)

  • Thomas, Ryland

    () (Bank of England)

  • Kirkham, Lewis

    () (Bank of England)

Abstract

This article reviews the main influences on broad money growth since the onset of the global crisis, focusing on the impact of the Monetary Policy Committee’s asset purchase programme (QE). The underlying weakness in money growth is likely to have reflected a combination of reduced nominal demand and a restructuring of banks’ balance sheets. QE has played a key role in offsetting some of this weakness and in a way that has not depended on an increase in bank lending. The first two rounds of QE seem to have had a similar proportionate impact on the money supply, but there is some evidence that the transmission mechanism of QE may have been different over the two episodes.

Suggested Citation

  • Butt, Nicholas & Domit, Silvia & McLeay, Michael & Thomas, Ryland & Kirkham, Lewis, 2012. "What can the money data tell us about the impact of QE?," Bank of England Quarterly Bulletin, Bank of England, vol. 52(4), pages 321-331.
  • Handle: RePEc:boe:qbullt:0089
    as

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    References listed on IDEAS

    as
    1. Nick McLaren & Ryan N. Banerjee & David Latto, 2014. "Using Changes in Auction Maturity Sectors to Help Identify the Impact of QE on Gilt Yields," Economic Journal, Royal Economic Society, vol. 0(576), pages 453-479, May.
    2. Button, Richard & Pezzini, Silvia & Rossiter, Neil, 2010. "Understanding the price of new lending to households," Bank of England Quarterly Bulletin, Bank of England, vol. 50(3), pages 172-182.
    3. Bell, Venetia & Young, Garry, 2010. "Understanding the weakness of bank lending," Bank of England Quarterly Bulletin, Bank of England, vol. 50(4), pages 311-320.
    4. Joyce, Michael & Tong, Matthew & Woods, Robert, 2011. "The United Kingdom’s quantitative easing policy: design, operation and impact," Bank of England Quarterly Bulletin, Bank of England, vol. 51(3), pages 200-212.
    5. Bridges, Jonathan & Thomas, Ryland, 2012. "The impact of QE on the UK economy – some supportive monetarist arithmetic," Bank of England working papers 442, Bank of England.
    6. Churm, Rohan & Radia, Amar & Leake, Jeremy & Srinivasan, Sylaja & Whisker, Rishard, 2012. "The Funding for Lending Scheme," Bank of England Quarterly Bulletin, Bank of England, vol. 52(4), pages 306-320.
    7. Bridges, Jonathan & Rossiter, Neil & Thomas, Ryland, 2011. "Understanding the recent weakness in broad money growth," Bank of England Quarterly Bulletin, Bank of England, vol. 51(1), pages 22-35.
    8. Thomas, Ryland & Hills, Sally & Dimsdale, Nicholas, 2010. "The UK recession in context — what do three centuries of data tell us?," Bank of England Quarterly Bulletin, Bank of England, vol. 50(4), pages 277-291.
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    Cited by:

    1. Butt, Nick & Churm, Rohan & McMahon, Michael & Morotz, Arpad & Schanz, Jochen, 2014. "QE and the bank lending channel in the United Kingdom," Bank of England working papers 511, Bank of England.
    2. Shakir, Tamarah & Tong, Matthew, 2014. "The interaction of the FPC and the MPC," Bank of England Quarterly Bulletin, Bank of England, vol. 54(4), pages 396-408.
    3. Yevgeniya Korniyenko & Elena Loukoianova, 2015. "The Impact of Unconventional Monetary Policy Measures by the Systemic Four on Global Liquidity and Monetary Conditions," IMF Working Papers 15/287, International Monetary Fund.
    4. Churm, Rohan & Joyce, Mike & Kapetanios, George & Theodoridis, Konstantinos, 2015. "Unconventional monetary policies and the macroeconomy: the impact of the United Kingdom's QE2 and Funding for Lending Scheme," Bank of England working papers 542, Bank of England.
    5. James Cloyne & Ryland Thomas & Alex Tuckett & Samuel Wills, 2015. "An Empirical Sectoral Model of Unconventional Monetary Policy: The Impact of QE," Manchester School, University of Manchester, vol. 83, pages 51-82, September.
    6. Booth, Philip, 2014. "Monetary policy, asset prices and financial institutions," Annals of Actuarial Science, Cambridge University Press, vol. 8(01), pages 9-41, March.
    7. McLeay, Michael & Radia, Amar & Thomas, Ryland, 2014. "Money creation in the modern economy," Bank of England Quarterly Bulletin, Bank of England, vol. 54(1), pages 14-27.
    8. Bell, Venetia & Butt, Nick & Talbot, James, 2013. "The Bank of England Bank Liabilities Survey," Bank of England Quarterly Bulletin, Bank of England, vol. 53(1), pages 68-76.
    9. Churm, Rohan & Radia, Amar & Leake, Jeremy & Srinivasan, Sylaja & Whisker, Rishard, 2012. "The Funding for Lending Scheme," Bank of England Quarterly Bulletin, Bank of England, vol. 52(4), pages 306-320.
    10. Dunne, Peter & Everett, Mary & Stuart, Rebecca, 2015. "The Expanded Asset Purchase Programme – What, Why and How of Euro Area QE," Quarterly Bulletin Articles, Central Bank of Ireland, pages 61-71, July.
    11. Paul Mercier, 2017. "Public debt, central bank and money: Some clarifications," BCL working papers 108, Central Bank of Luxembourg.
    12. Adriana Lojschova, 2017. "Did quantitative easing boost bank lending? The Slovak experience," Working and Discussion Papers WP 1/2017, Research Department, National Bank of Slovakia.
    13. Cloyne, James & Thomas, Ryland & Tuckett, Alex & Wills, Samuel, 2015. "A sectoral framework for analyzing money, credit and unconventional monetary policy," Bank of England working papers 556, Bank of England.
    14. Lojschova, Adriana, 2017. "Did quantitative easing boost bank lending? The Slovak experience," MPRA Paper 79567, University Library of Munich, Germany.

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