International effects of quantitative easing and foreign exchange intervention

• 成果类型: Article
• 署名作者: Kim, Duhyeong
• 署名单位: University System of Ohio; Kent State University; Kent State University Salem; Kent State University Kent; University System of Ohio; Kent State University; Kent State University Kent; Kent State University Salem
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2023.103815
• 发表日期: 2023
• 关键词: Quantitative easing; foreign exchange intervention; Collateral constraint; banking

摘要

A two-country general equilibrium model is developed to study the global consequences of quantitative easing and foreign exchange intervention. The model incorporates financial frictions such as limited commitment, differential pledgeability of assets as collateral, and a low supply of collateralizable assets. Due to differential asset pledgeability, financial intermediaries acquire different asset portfolios particular to their home country. Quantitative easing can reduce longterm nominal interest rates, mitigate financial frictions globally, and depreciate the currency of the country that supplies more pledgeable assets. The international effects of foreign exchange intervention depend on the implementing country. If implemented by the country that supplies more pledgeable assets, such intervention can ease financial frictions and enhance welfare globally.