Federal Reserve Bank of San Francisco
FRBSF Economic Letter
Estimating the macroeconomic effects of the Fed’s asset purchases
An analysis shows that the Federal Reserve’s large-scale asset purchases have been effective at reducing the economic costs of the zero lower bound on interest rates. Model simulations indicate that, by 2012, the past and projected expansion of the Fed’s securities holdings since late 2008 will lower the unemployment rate by 1½ percentage points relative to what it would have been absent the purchases. The asset purchases also have probably prevented the U.S. economy from falling into deflation.
Cite this item
Hess Chung & Jean-Philippe Laforte & David L. Reifschneider & John C. Williams, "Estimating the macroeconomic effects of the Fed’s asset purchases"
, Federal Reserve Bank of San Francisco, FRBSF Economic Letter, number 03, 2011.
Keywords: Monetary policy ; Government securities ; Interest rates ; Macroeconomics - Econometric models
This item with handle RePEc:fip:fedfel:y:2011:i:jan31:n:2011-03
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