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Unconventional monetary policy: the assessment


  • Christopher Bowdler
  • Amar Radia


The unconventional monetary policy measures adopted by the major central banks in the period since 2008 are discussed in this paper. We highlight some important differences between quantitative easing and conventional monetary policy and then evaluate the mechanisms through which quantitative easing may propagate to financial markets and the real economy, drawing on perspectives from monetarist and New Keynesian theory. Additional measures, intended to supplement or strengthen the effects of pure quantitative easing, often termed unconventional unconventional monetary policy, are also assessed. In our discussion we relate the various articles in this issue to some of the key research questions posed in relation to unconventional monetary policy. Copyright 2012, Oxford University Press.

Suggested Citation

  • Christopher Bowdler & Amar Radia, 2012. "Unconventional monetary policy: the assessment," Oxford Review of Economic Policy, Oxford University Press, vol. 28(4), pages 603-621, WINTER.
  • Handle: RePEc:oup:oxford:v:28:y:2012:i:4:p:603-621

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    References listed on IDEAS

    1. Michael A. S. Joyce & Nick McLaren & Chris Young, 2012. "Quantitative easing in the United Kingdom: evidence from financial markets on QE1 and QE2," Oxford Review of Economic Policy, Oxford University Press, vol. 28(4), pages 671-701, WINTER.
    2. Goodfriend, Marvin, 2011. "Central banking in the credit turmoil: An assessment of Federal Reserve practice," Journal of Monetary Economics, Elsevier, vol. 58(1), pages 1-12, January.
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    6. Francis Breedon & Jagjit S Chadha & Alex Waters, 2012. "The financial market impact of UK quantitative easing," BIS Papers chapters,in: Bank for International Settlements (ed.), Threat of fiscal dominance?, volume 65, pages 277-304 Bank for International Settlements.
    7. Tim Congdon, 1992. "Reflections On Monetarism," Books, Edward Elgar Publishing, number 102.
    8. Christopher Martin & Costas Milas, 2012. "Quantitative easing: a sceptical survey," Oxford Review of Economic Policy, Oxford University Press, vol. 28(4), pages 750-764, WINTER.
    9. David Cobham, 2012. "The past, present, and future of central banking," Oxford Review of Economic Policy, Oxford University Press, vol. 28(4), pages 729-749, WINTER.
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    11. Tobin, James, 1969. "A General Equilibrium Approach to Monetary Theory," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 1(1), pages 15-29, February.
    12. Roger E. A. Farmer, 2012. "The effect of conventional and unconventional monetary policy rules on inflation expectations: theory and evidence," Oxford Review of Economic Policy, Oxford University Press, vol. 28(4), pages 622-639, WINTER.
    13. Peter Sinclair & Colin Ellis, 2012. "Quantitative easing is not as unconventional as it seems," Oxford Review of Economic Policy, Oxford University Press, vol. 28(4), pages 837-854, WINTER.
    14. Robin Greenwood & Dimitri Vayanos, 2010. "Price Pressure in the Government Bond Market," American Economic Review, American Economic Association, vol. 100(2), pages 585-590, May.
    15. 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.
    16. Charles A. E. Goodhart & Jonathan P. Ashworth, 2012. "QE: a successful start may be running into diminishing returns," Oxford Review of Economic Policy, Oxford University Press, vol. 28(4), pages 640-670, WINTER.
    17. 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.
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    19. Philippine Cour-Thimann & Bernhard Winkler, 2012. "The ECB’s non-standard monetary policy measures: the role of institutional factors and financial structure," Oxford Review of Economic Policy, Oxford University Press, vol. 28(4), pages 765-803, WINTER.
    20. Andrés, Javier & López-Salido, J David & Nelson, Edward, 2004. "Tobin's Imperfect Asset Substitution in Optimizing General Equilibrium," CEPR Discussion Papers 4336, C.E.P.R. Discussion Papers.
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    Cited by:

    1. Cheng, Wenli & Zhang, Dingsheng, 2016. "How might the South be helped by Northern technology yet harmed by Northern money?," Economic Modelling, Elsevier, vol. 55(C), pages 83-91.
    2. Massimo Guidolin & Alexei G. Orlov & Manuela Pedio, 2014. "Understanding the Impact of Monetary Policy Shocks on the Corporate Bond Market in Good and Bad Times: A Markov Switching Model," BAFFI CAREFIN Working Papers 1623, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    3. Guidolin, Massimo & Orlov, Alexei G. & Pedio, Manuela, 2017. "The impact of monetary policy on corporate bonds under regime shifts," Journal of Banking & Finance, Elsevier, vol. 80(C), pages 176-202.
    4. Yılmaz, Derya, 2015. "Unconventional Monetary Policies in the Eurozone: Considering Theoretical Backgrounds and Policy Outcomes," Business and Economics Research Journal, Uludag University, Faculty of Economics and Administrative Sciences, vol. 6(3), pages 51-68, July.
    5. Jorg Bibow, 2016. "From Antigrowth Bias to Quantitative Easing: The ECB's Belated Conversion?," Economics Working Paper Archive wp_868, Levy Economics Institute.
    6. Francesco Saraceno & Roberto Tamborini, 2015. "How can it work? On the impact of quantitative easing in the Eurozone," DEM Working Papers 2015/03, Department of Economics and Management.
    7. Paul D. Mueller & Joshua Wojnilower, 2016. "The Federal Reserve's Floor System: Immediate Gain for Remote Pain?," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 31(Summer 20), pages 15-40.
    8. Jakub Janus, 2016. "The Transmission Mechanism Of Unconventional Monetary Policy," Oeconomia Copernicana, Institute of Economic Research, vol. 7(1), pages 7-21, March.
    9. Jörg Bibow, 2015. "The euro's savior? Assessing the ECB's crisis management performance and potential for crisis resolution," IMK Studies 42-2015, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    10. Wang, Ling, 2016. "Unconventional monetary policy and aggregate bank lending: Does financial structure matter?," Journal of Policy Modeling, Elsevier, vol. 38(6), pages 1060-1077.
    11. Christopher Spencer, 2014. "Conventional and Unconventional Votes: A Tale of Three Monetary Policy Committees," Discussion Paper Series 2014_11, Department of Economics, Loughborough University, revised Dec 2014.
    12. 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.
    13. Michal Jurek & Pawel Marszalek, 2015. "Policy alternatives for the relationship between ECB monetary and financial policies and new member states," Working papers wpaper112, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    14. Matteo Falagiarda, 2014. "Evaluating quantitative easing: a DSGE approach," International Journal of Monetary Economics and Finance, Inderscience Enterprises Ltd, vol. 7(4), pages 302-327.
    15. Jorg Bibow, 2015. "The Euro's Savior? Assessing the ECB's Crisis Management Performance and Potential for Crisis Resolution," Economics Working Paper Archive wp_845, Levy Economics Institute.
    16. Ryan-Collins, Josh & Werner, Richard A. & Castle, Jennifer, 2016. "A half-century diversion of monetary policy? An empirical horse-race to identify the UK variable most likely to deliver the desired nominal GDP growth rate," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 43(C), pages 158-176.

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