Topic: Quantitative Easing
Speaker: Wei Cui,University College London
Time: Monday, 20 May, 16:00-17:30
Location: Room 217, Guanghua Building 2
Is Quantitative Easing (QE) an effective substitute for conventional monetary policy? We study this question using a heterogeneous-agents model with nominal rigidities, as well as liquid and partially liquid wealth. The direct effect of QE is determined by the difference in marginal propensities to consume out of the two types of wealth, which is large according to empirical studies. QE therefore emerges as a powerful policy instrument to anchor expectations and stabilize output and inflation. However, QE interventions come with strong side effects on inequality and welfare. Estimation of the model reveals that QE greatly dampened the U.S. Great Recession.
Wei Cui is a macroeconomist specialized in asset liquidity and business cycle studies. His work demonstrates the important impact of asset market search, asset market beliefs, and the distribution of liquidity on the aggregate economy, together with the corresponding optimal monetary-fiscal policy designs. His research papers appear in leading academic journals including American Economic Review (P&P), European Economic Review, Journal of Economic Dynamics and Control, and Journal of the European Economic Association. He obtained his Ph.D. in Economics from Princeton University and is currently an assistant professor at University College London.
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