IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/18463.html
   My bibliography  Save this paper

Does QE generate more inflation than conventional monetary policy?

Author

Listed:
  • Wieladek, Tomasz

Abstract

I study the inflation response of QE relative to the same size conventional monetary policy shock in VAR models for the Euro Area, UK and US. I use eight different measures of QE used in previous QE VAR studies. The results consistently show that QE has a 2-4 times larger short-term effect on inflation than conventional monetary policy in the UK and the US, but not in the Euro Area. An analysis of the transmission mechanism suggests that stronger household inflation expectations, money supply and exchange rate responses are behind the larger inflation effect of QE. Meta-analysis of 82 previous conventional monetary policy and QE VAR studies reveals similar results: QE has a 2-4 times larger effect on inflation than conventional monetary policy in the UK and US, but not the Euro Area. This suggests that the conclusions of this paper are a general finding of the VAR literature and hence likely robust to different methodological choices.

Suggested Citation

  • Wieladek, Tomasz, 2023. "Does QE generate more inflation than conventional monetary policy?," CEPR Discussion Papers 18463, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:18463
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP18463
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

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

    More about this item

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

    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:cpr:ceprdp:18463. 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: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    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.