A quantitative easing experiment
Adrian Penalver,
Nobuyuki Hanaki,
Eizo Akiyama and
Yukihiko Funaki ()
ISER Discussion Paper from Institute of Social and Economic Research, Osaka University
Abstract:
We experimentally investigate the effect of a central bank buying bonds for cash in a quantitative easing (QE) operation. In our experiment, the bonds are perfect substitutes for cash and have a constant fundamental value which is not affected by QE in the rational expectations equilibrium. We find that QE raises bond prices above those in the benchmark treatment without QE. Subjects in the benchmark treatment learned to trade the bonds at their fundamental value but those in treatments with QE became more convinced after repeated exposure to the same treatment that QE boosts bond prices. This suggests the possibility of a behavioural channel for the observed effects of actual QE operations on bond yields.
Date: 2020-07
New Economics Papers: this item is included in nep-cba, nep-exp and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)
Downloads: (external link)
https://www.iser.osaka-u.ac.jp/library/dp/2020/DP1094.pdf
Related works:
Journal Article: A quantitative easing experiment (2020)
Working Paper: A Quantitative Easing Experiment (2018)
Working Paper: A Quantitative Easing Experiment (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:dpr:wpaper:1094
Access Statistics for this paper
More papers in ISER Discussion Paper from Institute of Social and Economic Research, Osaka University Contact information at EDIRC.
Bibliographic data for series maintained by Librarian ().