Loosening the Belt: A Critical Assessment of the U.S. Federal Reserve's Large-Scale Asset Purchases

Abstract

In response to the 2008 financial crisis, the U.S. Federal Reserve moved away from conventional monetary policy, instead carrying out credit and quantitative easing through a series of large-scale asset purchases. This paper discusses the effect of the unconventional strategies employed, as they relate to various macroeconomic variables. It seeks to provide clarity on the unconventional monetary policy itself, but also the Federal Reserve’s objectives behind its use. To this end, it will assess the impacts of the U.S. experience empirically.