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Exiting the Unconventional Monetary Policies

Author

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  • Badescu Bogdan

    (The Bucharest University of Economic Studies)

Abstract

Unconventional monetary policies have provided the financial sector with the time needed to implement the necessary reforms, but it is unclear how useful they were to support the economic activity. From this point of view, perhaps the most important lesson of the crisis is that there is a real need for a resilient financial system and the path to that is appropriate regulation. Exiting the PMN is hampered by the fact that it is difficult to estimate when benefits of these policies will be dominated by induced risks. Subsequently, it is needed to compare the effects of an early exit vs. a late one, which means making a choice between reducing the risk of inflation in the future (early exit) and supporting growth (late exit). Return to normality will imply two courses of action: the normalization of the policy rate and of the size of central banks’ balance sheet.

Suggested Citation

  • Badescu Bogdan, 2015. "Exiting the Unconventional Monetary Policies," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(1), pages 660-664, May.
    • Handle: RePEc:ovi:oviste:v:xv:y:2015:i:1:p:660-664
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    More about this item

    Keywords

    unconventional monetary policies; policy rate; inflation; economic growth;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • 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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