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Monetary policy of quantitative easing: causes, process and risks
LEXA, David
The bachelor thesis is devoted to monetary policy of quantitative easing, to an unconventional way how central banks are trying to fight against the threat of deflation and support economic growth. The goal of this paper is to introduce this policy, analyse effectiveness of particular example of central bank which adopted quantitative easing as its monetary policy and finally, define the most relevant risks.
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Quantitative easing and its impact on the economy of the United States of America
Doležal, Ondřej ; Ježek, Tomáš (advisor) ; Jazic, Viktorija (referee)
This thesis focuses on the quantitative easing as a tool used by the U.S. central bank in an effor to enhance the expansionary monetary policy even during the reduction of major interest rate close to zero. The aim is to analyze the impact of the first and second round of quantitative easing on the economy of the Unites States of America practiced by Fed. The aim is achieved primarily by using event study, which examined the effect of the first and second round of quantitatitve easing on the yield of U.S. Treasuries. In the context of quantitative easing other economic data such as macroeconomic development of U.S. economy or the situation in the real estat and stock marekts are studied. The second major area of this thesis is the analysis of inflation. The sharp rise of inflation is considered as a one of the major risks associated with quantitative easing. Relationship between quantitative easing and inflation is mainly studied by analyzing the behavior of banks and other economic subjects and by using the results of quantitative easing policiy in the countries which also used that policy.
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The central banks' non-standard monetary policy: quantitative easing
Čáp, Daniel ; Koderová, Jitka (advisor) ; Osička, Štěpán (referee)
The thesis deals with non-standard monetary policies of three central banks throughout the global financial crisis. The reason for using non-standard measures was also liquidity trap when monetary policy becomes ineffective. An important milestone was collapse of investment bank Lehman Brothers in September 2008. The central banks carried out some non-standard measures before the collapse such as the emergence of new or expanding existing facilities. However, after the collapse there was panic at the financial and capital markets and market interest rate spreads rose. Central banks were forced to respond to expanding its balance sheet and reducing the monetary policy rate to zero. The main reason for increasing total assets was securities purchases by central banks. The measure, which is expanding the balance sheet is called quantitative easing. In the thesis I try to describe and compare the non-standard measures (with a focus on quantitative easing) taken by the three central banks (Bank of England, the Fed and the ECB) and answer the question whether the measures are effective and whether they can replace the standard monetary policy.
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Quantitative easing and its impact on the economy of the United states of America
Löbl, Václav ; Brůna, Karel (advisor) ; Vránková, Martina (referee)
The master thesis analyzes "quantitative easing" policy in the USA which is very controversial. Quantitative easing influences a liquidity of the bank system and has different impact on economic variables. The relationship between growth of total reserves and economic variables is analyzed during 9/2008 - 3/2012 by Eviews program. The conclusion is that impact of quantitative easing policy on economic variables has been different in comparison with former assumptions.
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Monetary policy of the Federal Reserve System during financial and economic crisis
Babušák, Martin ; Mandel, Martin (advisor) ; Kodera, Jan (referee)
The aim of the thesis is to evaluate the effectiveness of measures taken by the Federal Reserve System in response to the 2007 financial crisis that was later joined by economic crisis. It analyzes effects caused by modification of existing programs, creation of new credit programs, support of systemically important institutions by the Fed and programs of outright purchase of selected assets on the open market. The thesis also examines the behavior of the Fed in setting of a target interest rate in longer term, from 2000 to 2011. The thesis verifies the validity of the Taylor rule of monetary policy by using regression analysis. Appendix at the end of the thesis emphasizes the importance of the U.S. dollar in the current international monetary system and the associated implications for the external stability of the U.S. economy.
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Quantitative Easing and its impact on commodity prices
Jakl, Jakub ; Hurník, Jaromír (advisor) ; Potužák, Pavel (referee)
The main focus of this thesis rests in the assessment of the quantitative easing policy impact on commodity prices and prices of commodity derivatives in the US. Several VAR models have been constructed in this paper to capture the relations between time series of monetary policy variables and commodity markets indices. The impulse-response analysis applied in the VAR models has discovered the causal connection between the QE policy and the value of commodity indices. The official announcement of initiation (extension) of the policy of the QE policy and its realization consisting of purchases of vast amount of treasury securities and federal agency debt and MBS has lead to the major commodity indices increase. Since this fact has been overlooked by Fed so far, its acceptance might enhance the realization of possible future QE policy and the valuation of the QE as a monetary policy alternative in conditions of zero-bound.
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Issues of Quantitative Easing
Šimíček, Petr ; Ježek, Tomáš (advisor) ; Munzi, Tomáš (referee)
The purpose of this paper is to evaluate the effects of the non-standard instrument of the monetary policy -- quantitative easing (QE) on the economies of the countries (or currency unions) that use this policy (Japan, USA, United Kingdom, eurozone). This paper pays attention at the QE mechanism description and its macroeconomic context, especially connection of QE with financial markets and real economy. It is shown a wide range of possible impacts on GDP, inflation, commodities, financial assets, financial system stability and expectations within the transmission mechanism. Newest data (2012), studies and paradigms of short run macroeconomics (especially Austrian business cycle theory, new Keynesian economics and real business cycle theory) are used.
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Monetary policy of the U.S. central bank and its impact on U.S. economy
Pozděchová, Lenka ; Koderová, Jitka (advisor) ; Dohányos, Vojtech (referee)
The aim of this thesis is monetary policy of the Federal Reserve during the global financial crisis and its impact on the U.S. economy. Intensively carried out the financial crisis in 2007 - 2009. At that time, the Fed has created several tools to support liquidity of depository institutions and primary dealers, which are represented mainly by investment banks and other businesses, such as money market funds. The balance sheet of the central bank has fundamentally transformed. Securities accepted in open market operations have expanded and amount of the balance sheet has increased several times. Operations that change size of liabilities and composition of assets are called quantitative easing. After the interventions of the U.S. central bank the financial markets stabilized and Fed set aside some of the new tools. From December 2007 to June 2009 was the U.S. economy officially in recession. Since then has economic activity been growing but only very slowly.
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The effect of monetary policy on the Japanese economy during the 90 years
Čížek, Pavel ; Dočkal, Dalibor (advisor) ; Štěpánek, Pavel (referee)
The aim of this paper is to analyze the effects of monetary policy to the Japanese real economy during the eighties and nineties, whichare often referred to as the the Lost Decade. The theoretical part is devoted to the basic description and comparison of selected theories of monetary policy. It focuses primarily on the Liquidity trap, Friedman's monetarism and also deals with the benefits of mainstream economics and Austrian School. The maen finding is analysis of selected data in the Japanese economy sensitive to monetary policy. On the basis of evaluated data shows to what extent the real product influenced monetary policy. As exploration of the data is chosen short-term interest rate at which banks offer loans to investors, share prices, changes in money supply and demand and the development of gross domestic product. The result of the examination is to determine the proportion of the impact of monetary policy to fluctuations in the so-called Lost decade.
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German monetary crisis 1914-1923 - lessons for today?
Kaňka, Adam ; Kollár, Miroslav (advisor) ; Janíčko, Martin (referee)
The work deals with the reasons for the conversion of the German postwar inflation to hyperinflation. Further, it dwells with contemporary unconventional monetary policies, especially with quantitative easing, which shall bring some economies back from the depression to the path of conjuncture. By assessment of this instrument, with regard to the experience from Japan, the work seeks to answer the question whether it is successful or not. At the same time, it argues possible side effects which could, in the case of late start of an exit strategy, cause financial instability. It tries to find out whether the instability could possibly reach such dimension as in postwar Germany
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