The missing spillover of base expansion into monetary aggregates: Is there a puzzle?

摘要: The seeming impotence of monetary base expansion to influence money growth during the global financial crisis and European sovereign debt crisis, can be regarded as a puzzle. A possible explanation is that central banks have used unconventional policies pursue dual objectives: stabilize system stimulate economy. While achieving latter objective may result in positive spillover into growth, this does not necessarily hold for former objective. This paper aims disentangle these effects by estimating state space model which adjusted distortions arising from instability markets. We find stress bond markets, measured various indicators, has significantly affected relationship between EA, but US.