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Unconventional Monetary Policies : Past, Present, and Future

Abstract : This thesis touches upon important aspects that involve the past, present and future of unconventional monetary policies (UMPs): their historical background and conceptual debate; the experience of UMPs in advanced economies, with the Euro area case; the effects of UMPs in emerging economies, and their links with corporate debt; the process of UMPs exit and the future of monetary policy frameworks. First, by reporting several historical experiences of the Bank of England, Federal Reserve System and Bank of Japan, we have observed that policies which after the 2008 crisis were considered to be “unconventional” had already been adopted in various occasions before. Second, on the conceptual debate, we analyzed UMPs framework (objectives, measures, transmission channels, and effects), with more detailed attention on nominal negative interest rates, measure which had not been implemented before 2008. Third, on UMPs experience in the Euro area, we observed that UMPs were capable of avoiding a major financial collapse after 2008, and managed partial improvements in macroeconomic indicators. In particular, sovereign yields have presented distinct responses according to each asset purchase program announced/implemented. However, UMPs were not able alone to solve all economic problems in the Euro area, which deserve the support of additional policies (fiscal, industrial, institutional, financial regulation/supervision) to ensure a sustained growth path in the medium/long term. Fourth, on UMPs effects in emerging economies, we have observed the important role of accommodative measures of the main advanced economies central banks, together with other global factors, to explain the rise of corporate debt. Its economic policy implications are related to the need for enhancement in financial regulation, macro and microprudential instruments to increase the resilience of the financial system against crises. Finally, the current process of UMPs exit is asynchronous, and gradual sequencing and proper communication will be required to avoid major disruptions in international financial markets. Future monetary policy frameworks may take lessons from past and recent experiences and incorporate some UMPs in their toolkits, in order to increase the effectiveness of monetary policies and reduce financial stability concerns, once the challenges posed by financial markets are increasingly higher.
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Submitted on : Monday, July 13, 2020 - 6:45:09 PM
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Cristiano Boaventura Duarte. Unconventional Monetary Policies : Past, Present, and Future. Economics and Finance. Université Sorbonne Paris Cité; Universidade federal do Rio de Janeiro. Instituto de Economia, 2019. English. ⟨NNT : 2019USPCD007⟩. ⟨tel-02898356⟩



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