econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 22 August 2015

The Impact Of Unconventional Monetary Policy On Firm Financing

by Philadelphia Fed

-- this post authored by Nathan Foley-Fisher, Rodney Ramcharan, and Edison Yu

In response to the financial crisis and the weak economy, the federal funds rate has been at the zero lower bound since December 2008. To help overcome the zero lower bound constraint and to stimulate economic activity, the Federal Reserve and other central banks have implemented a number of unconventional policies, including a series of large-scale asset purchases or quantitative easings (QEs). These policies are in part intended to work around the zero lower bound constraint by directly buying assets, such as U.S. Treasury bonds and mortgage-backed securities, to offset disruptions in private sector intermediation in the aftermath of the financial crisis and stimulate the economy (Cahill et al. (2013), Gertler and Karadi (2011), Krishnamurthy and Vissing-Jorgensen (2011), and Shleifer and Vishny (2011)).

This paper develops a number of empirical tests to understand better the impact of unconventional monetary policy. We focus mainly on the Federal Reserve's attempt to flatten the yield curve through the maturity extension program (MEP), which was announced on Sept. 21, 2011. The MEP was explicitly intended to reduce the supply of long-term Treasury securities and put downward pressure on longer-term interest rates, especially on those assets considered to be close substitutes for long-term Treasury securities. Lower borrowing costs and increased credit availability were then expected to relieve possibly binding financing constraints on firms and households. To that end, the MEP committed the Federal Reserve to sell about $400 billion in shorter-term Treasury securities and use the proceeds to buy longer-term Treasury securities. The program was extended in June 2012 through December 2012 for an additional $267 billion. In this paper, we examine how stock prices, debt issuance, and firms' investment and hiring activities reacted to the MEP.

[click on image below to continue reading]

Source: http://www.philadelphiafed.org/research-and-data/publications/working-papers/2015/wp15-30.pdf

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.





Econintersect Contributors


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
Big Mess in Italy
Are You Feeling the Economic Surge?
News Blog
The Best Countries In The World
What We Read Today 03 December 2016 - Public Edition
Big Mac Index In Its 30th Year
What We Read Today 03 December 2016
Scientists Find Giant Underground Ice Reserve On Mars
Sustained 3 To 4% GDP Growth Is A Huge Stretch
New Earthquake Risk Model Confirms Possibility Of Statewide Earthquake In California
Subprime Auto Debt Grows Despite Rising Delinquencies
Silver Sentiment Looks Golden
Infographic Of The Day: Investing In A Cure For Cancer
Early Headlines: Trump Campaigning Still, WaPo Finds Voter Fraud Favored Trump, No Carolina GOP Shotguns For Voter Fraud, New Age Of Blacklisting, All Eyes On Italy, Big Bucks In India And More
What Did The EU Ever Do For Europeans?
The 10 Most Stolen Cars In America
Investing Blog
How To Invest When The Fed Destroys Capitalism
Technical Thoughts: Manage Risk
Opinion Blog
Jobs Without Disruptions Through Concordian Economics
Modern Slavery
Precious Metals Blog
Silver Prices Rebounded Today: Where They Are Headed
Live Markets
02Dec2016 Market Close: WTI Crude Climbed Back Up To Previous 51 Handle, US Dollar Index Trading At The100 Level, Oil Rig Count At 10-Month High
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government



Crowdfunding ....






























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved