Flow Effects of Central Bank Asset Purchases on Sovereign Bond Prices: Evidence from a Natural Experiment

2019 ◽  
Vol 52 (6) ◽  
pp. 1467-1491 ◽  
Author(s):  
ROBERTO A. DE SANTIS ◽  
FÉDÉRIC HOLM‐HADULLA
Keyword(s):  
Central Bank ◽  
Natural Experiment ◽  
Bond Prices ◽  
Sovereign Bond ◽  
Asset Purchases ◽  
Flow Effects

scholarly journals Conventional and Unconventional Monetary Policy with Endogenous Collateral Constraints

2015 ◽  
Vol 7 (1) ◽  
pp. 1-43 ◽  
Author(s):  
Aloísio Araújo ◽  
Susan Schommer ◽  
Michael Woodford
Keyword(s):  
Central Bank ◽  
Financial Constraints ◽  
Aggregate Demand ◽  
Pareto Improvement ◽  
Interest Rate Policy ◽  
Collateral Constraints ◽  
Additional Dimension ◽  
Rate Policy ◽  
Asset Purchases ◽  
The One

We consider the effects of central bank purchases of a risky asset as an additional dimension of policy alongside “conventional” interest rate policy in a general-equilibrium model of asset pricing with endogenous collateral constraints. The effects of asset purchases depend on the way that they affect collateral constraints. We show that under some circumstances, central bank purchases relax financial constraints, increase aggregate demand, and may even achieve a Pareto improvement; but in other cases, they tighten financial constraints, reduce aggregate demand, and lower welfare. The latter case is almost certainly the one that arises if central bank purchases are sufficiently large. (JEL D51, E43, E44, E52, E58)

scholarly journals Empowering Central Bank Asset Purchases: The Role of Financial Policies

2019 ◽  
Author(s):  
Matthieu Darracq Paries ◽  
Jenny Körner ◽  
Niki Papadopoulou
Keyword(s):  
Central Bank ◽  
Financial Policies ◽  
Asset Purchases

Investigating a Debt Channel for the Smoot-Hawley Tariffs: Evidence from the Sovereign Bond Market

1999 ◽  
Vol 59 (3) ◽  
pp. 748-761
Author(s):  
Kevin Carey
Keyword(s):  
Significant Relationship ◽  
Bond Market ◽  
Debt Service ◽  
Bond Price ◽  
Bond Prices ◽  
Individual Country ◽  
Price Changes ◽  
Sovereign Bond ◽  
Price Data ◽  
Country Level

I examine the change in prices of foreign sovereign dollar bonds over several weeks in 1930 that marked major legislative progress for the Smoot-Hawley tariffs. If the market was preoccupied by anticipated debt-repayment problems arising from the tariffs, this should be visible in the cross-countty pattern of bond prices. The bond price data are compared to indicators of country sensitivity to the tariffs and debt service. A significant relationship is found for bond price changes in June 1930, but the size of the effect is very small. Analysis at the regional and individual country level reveals some puzzling cases.

Sign in / Sign up

Export Citation Format

Share Document