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- Title
Housing, the credit market, and unconventional monetary policies: from the sovereign crisis to the great lockdown.
- Authors
Ghiaie, Hamed
- 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.
- Subjects
EUROPEAN Central Bank; BOND market; MONETARY policy; EUROZONE; COVID-19 pandemic; BANK investments; FISCAL policy
- Publication
Oxford Economic Papers, 2024, Vol 76, Issue 2, p330
- ISSN
0030-7653
- Publication type
Article
- DOI
10.1093/oep/gpad004