Asset Purchases Research Articles

Spillback effects of US unconventional monetary policy

This study examines the spillback effects of US forward guidance (FG) and large-scale asset purchases (LSAPs) policies based on a proxy structural vector autoregression model and structural scenario analysis. We use high-frequency asset price surprises to identify FG and LSAP shocks. We find that both FG and LSAP shocks have significant spillback effects on economic activity and inflation in the US. Geographically, spillbacks of US unconventional monetary policies materialize more for advanced economies than emerging market economies. In addition, we find that spillbacks materialize through the exchange rate channel, the Tobin’s q channel, and the cash flow channel.

Exchange rate spillover, carry trades, and the COVID-19 pandemic

Although it is widely accepted that exchange rates are connected, what drives these connections remains an unsettled question. We examine the interconnections and spillovers of G10 currencies over the period from January 1, 2018 to June 17, 2021. We find that the Euro and Australian dollar serve as risk transmitters whereas the Japanese yen operates as a risk recipient. During the COVID-19 pandemic period, countries with higher infection cases experience currency depreciation and transmit more currency risk to others. In response to this crisis, the Fed adopted the large-scale asset purchase program that weakened the USD and increased the demand for high-yield currencies through the portfolio rebalancing channel. The appreciation of high-yield currencies further attracts carry trades and enhances their risk transmission to low-yield currencies. Furthermore, we provide evidence to show that the COVID-19 infection cases, the Fed's policy, and carry trades are crucial determinants of exchange rate spillovers.

Central Bank Balance Sheet Policies Without Rational Expectations

Abstract We study the effects of central bank balance sheet policies—namely, quantitative easing and foreign exchange interventions—in a model where people form expectations through an iterative level-k thinking process. We emphasize two main theoretical results. First, under a broad set of conditions, central bank interventions are effective under level-k thinking, while they are neutral in the rational expectations equilibrium. Second, when preferences exhibit constant relative risk aversion, asset purchases increase aggregate output if they target assets with pro-cyclical returns but reduce it if asset returns are counter-cyclical. Finally, we empirically show that forecast errors about future asset prices are predictable by balance sheet interventions, a property that differentiates our channel from popular alternatives, such as portfolio-balance and signaling channels.

Housing, the credit market, and unconventional monetary policies: from the sovereign crisis to the great lockdown

Abstract This article evaluates the interactions between housing, the credit market, and the ECB’s asset purchase program (APP) from 2015 until 2020 and then in the course of the ECB’s pandemic emergency purchase program (PEPP) in 2020. The model is calibrated for the euro area. The findings illustrate the way in which macrohousing channels affect bank portfolio rebalancing which is the main channel for asset purchases to influence the economy. The results show that asset purchasing performs better during a crisis, particularly if it is conducted for an appropriate extent of time. The findings suggest that the PEPP alone is not sufficient to accelerate recovery. As a result, further actions such as timely targeted fiscal policies are required to step up recovery. However, to protect the financial sector, the PEPP should be extended until the Covid-19 crisis phase is over.

Development of Digital Transformation in Raising the Efficiency of Workers in Medical Devices: is Digital Transformation More Effective? – Cross-Sectional Study Medical Equipment Technology Department, Majmaah University, Saudi Arabia

Background: Digital transformation is a process that aims to improve an entity by causing material changes to its properties through combinations of information, computing, communication, and connectivity technologies. DT has an impact on a variety of companies, including the purchase of digital assets, the creation of digital growth strategies, and the modification of internal organizational structures. Aim of study: This cross-sectional study navigates in the research that evaluate the level of raising in efficiency of performance of workers in medical devices. Methodology: This cross-sectional study collected data in the form of digital and paper questionnaires and then analyze these data to know if the hypothesis of research accepted or rejected via this descriptive analysis. The target number of questionnaires are 300 digital questionnaire, and 100 paper questionnaire and target participants are those work with medical device to answer the questions. Result: the results showed that Most had bachelor, 24% diploma, and 8% master degree, and most had experience years less than 5 years.Virtual Reality for Patient Treatment was ranked 7.5%, with Big Data analysis ranked 3.8%, followed by Medical Records (1.9%). The most agreement items were (We have a record of patient visits to follow up on their visits to hospital) and (We use digital analysis tool to make better operational decisions). Results showed the efficiency of workers level was high with mean = 4.17. Conclusion: This study demonstrates that types of digital transformation have an impact on the healthcare business and predict how they will improve the productivity of medical device professionals.

PELATIHAN PENGELOLAAN PENGELUARAN PRODUKTIF TERHADAP LABA AKUNTANSI PADA UMKM

MSMEs, as small-scale household businesses, often do not have an adequate level of financial management knowledge. The business profit generated, of which the largest portion is usually used to meet family consumption needs, is neglected in favor of business development. with the method of introducing productive finance to their business profits and continuing with management assistance so that MSMEs can make decisions to allocate some of their business profits to productive financial expenditures. Productive expenditure itself can be in the form of business development, investment, or the purchase of productive assets, which can provide additional benefits beyond the business profits that have been realized by MSMEs so far. The program for the importance of productive financial management for MSMEs says that the operating profit generated can support business finances. Implementation of programs and strategies is carried out by providing socialization on productive expenditure to MSMEs actors and providing assistance in choosing productive expenditure according to the resources they have. Financial management assistance allows for consistent monitoring and control of expenditures, particularly productive expenditures. Assistance is expected to improve financial management knowledge of accounting profit and assist SME businesses in making strategic decisions on productive expenditure. 
 
 Keywords: MSMEs, Financial management, productive expenditure, business development

The impact of Bank of Japan’s exchange-traded fund purchases

The Bank of Japan (BOJ) enhanced its large-scale asset purchases in October 2010 by purchasing equity exchange-traded funds (ETFs). This study is the first to demonstrate that the BOJ provides downside protection for stock prices through the countercyclical purchase of ETFs. The BOJ responds to a large negative stock return during the overnight and morning periods, and submits purchase orders during lunchtime. Using the BOJ’s March 2020 announcement of doubling the annual purchase amount during the COVID-19 pandemic, this study also finds that the announcement effect is small and temporary. In contrast, the flow effect of the actual purchases is significant and increases. The BOJ’s countercyclical ETF purchase prevents equity risk premia from rising during an economic downturn.

Secrets in Asset Purchases: Estimating the Unofficial Incomes of Officials

Secrets in Asset Purchases: Estimating the Unofficial Incomes of Officials

Should investors rely on central bank asset purchases to backstop markets?

During the global financial crisis, central banks in advanced economies cut policy rates to near zero, and then provided further stimulus via balance sheet expansion. In many instances this took the form of quantitative easing — central banks creating new money with which to purchase securities. With years of quantitative easing behind us, and aggressive measures from central banks during the COVID-19 pandemic, should investors now expect central banks to backstop financial markets? This paper examines asset purchases from the twin perspectives of monetary and financial stability, and argues that investors should not expect central banks to always come to their rescue.

Toward a Green Economy: The Role of Central Bank's Asset Purchases

Toward a Green Economy: The Role of Central Bank's Asset Purchases

Fear (No More) of Floating: Asset Purchases and Exchange Rate Dynamics

Fear (No More) of Floating: Asset Purchases and Exchange Rate Dynamics

Monetary Policy Interactions: The Policy Rate, Asset Purchases, and Optimal Policy with an Interest Rate Peg

Monetary Policy Interactions: The Policy Rate, Asset Purchases, and Optimal Policy with an Interest Rate Peg

The pandemic emergency asset purchase and the sovereign bond market connectedness

We examined the extent to which the biggest euro area sovereign bond markets are connected during the 2017-2020 period. Accordingly, we used the recent Gabaue (2020)'s approach viewed as an alternative to Diebold and Yilmaz's volatility connectedness methodology. We find that such markets are considerably connected during the whole period and the spillovers are relatively time varying. The results also show that the Spanish bond market is the primary net transmitter of shocks, followed by the Italian bond market, while the markets for Germany and France are the main net receivers. Second, we highlight some contribution of ECB's asset purchase and other monetary policy announcements to bilateral spillovers. Also, some pronounced spillovers are found to be generated from the monetary policy in US. Finally, the effect differs widely across bilateral linkages in terms of sign and magnitudes. A likely explanation is that investors started discriminating more through markets.

The Significance of the 5 May 2020 Judgment of the Constitutional Court of the Federal Republic of Germany (Weiss II) for the Process of Integration of the European Union Financial Market

Since the financial crisis of 2007/2008, we have been dealing - at the level of the European Union - with a special "dialogue" between the European and German courts. The subject of this "dialogue" is the decisions of the European Central Bank on the program for the purchase of public sector assets on secondary markets. The ECB's activity, as well as the involvement of the national central banks of the Eurosystem in the implementation of these decisions, has been met with dissatisfaction by German politicians, culminating in the title judgment of the Constitutional Court of the Federal Republic of Germany. In the paper, the author analyzed the judgments, particularly from the perspective of the process of integration of the European Union financial market and the importance of the judgments for this process taking into account the key principles of EU law: proportionality and supremacy of EU law.

Is the Bond Market Competitive? Evidence From the ECB's Asset Purchase Programme

Is the Bond Market Competitive? Evidence From the ECB's Asset Purchase Programme

On the Macroeconomic Effects of Reinvestments in Asset Purchase Programmes

On the Macroeconomic Effects of Reinvestments in Asset Purchase Programmes

Price Pressure During Central Bank Asset Purchases: Evidence From Covered Bonds

Price Pressure During Central Bank Asset Purchases: Evidence From Covered Bonds

The impact of ECB's Pandemic Emergency Asset Purchase announcements on sovereign bond markets: Evidence from Euro area countries

The impact of ECB's Pandemic Emergency Asset Purchase announcements on sovereign bond markets: Evidence from Euro area countries

The impact of ECB's pandemic emergency asset purchase announcements on sovereign bond markets: evidence from Euro area countries

The impact of ECB's pandemic emergency asset purchase announcements on sovereign bond markets: evidence from Euro area countries

Evaluating Central Bank Asset Purchases in a Term Structure Model With a Forward-looking Supply Factor

Evaluating Central Bank Asset Purchases in a Term Structure Model With a Forward-looking Supply Factor