Unconventional Monetary Policies: An Appraisal

37 Pages Posted: 26 Jan 2010

See all articles by Claudio E. V. Borio

Claudio E. V. Borio

Bank for International Settlements (BIS) - Research and Policy Analysis

Piti Disyatat

Puey Ungphakorn Institute for Economic Research, Bank of Thailand

Multiple version iconThere are 3 versions of this paper

Date Written: November 1, 2009

Abstract

The recent global financial crisis has led central banks to rely heavily on "unconventional" monetary policies. This alternative approach to policy has generated much discussion and a heated and at times confusing debate. The debate has been complicated by the use of different definitions and conflicting views of the mechanisms at work. This paper sets out a framework for classifying and thinking about such policies, highlighting how they can be viewed within the overall context of monetary policy implementation. The framework clarifies the differences among the various forms of unconventional monetary policy, provides a systematic characterisation of the wide range of central bank responses to the crisis, helps to underscore the channels of transmission, and identifies some of the main policy challenges. In the process, the paper also addresses a number of contentious analytical issues, notably the role of bank reserves and their inflationary consequences.

Keywords: unconventional monetary policy, balance sheet policy, credit policy, quantitative easing, credit easing, monetary policy implementation, transmission mechanism, interest rates

JEL Classification: E40, E50, E52, E58, E60

Suggested Citation

Borio, Claudio E.V. and Disyatat, Piti, Unconventional Monetary Policies: An Appraisal (November 1, 2009). BIS Working Paper No. 292. Available at SSRN: https://ssrn.com/abstract=1541243 or http://dx.doi.org/10.2139/ssrn.1541243

Claudio E.V. Borio

Bank for International Settlements (BIS) - Research and Policy Analysis ( email )

CH-4002 Basel, Basel-Stadt
Switzerland

Piti Disyatat (Contact Author)

Puey Ungphakorn Institute for Economic Research, Bank of Thailand ( email )

273 Samsen Road
Bangkhunphrom, Bangkok 10200
Thailand

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