Advances in Economics, Management and Political Sciences
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Proceedings of the 7th International Conference on Economic Management and Green Development
Series Vol. 44 , 10 November 2023
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The Impact and Issues of Portfolio Rebalancing Channel in Quantitative Easing During COVID-19
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Abstract
As the largest black swan event in recent years, the COVID-19 has affected the development of the global economy. As the world's largest economy and one of the countries with the most severe epidemic, the United States has suffered a heavy economic blow. To promote economic recovery, the Federal Reserve has adopted a series of loose policies. This includes the most typical quantitative easing policy. Through literature research, this paper mainly analyzes the impact of the portfolio rebalancing channel in quantitative easing on the US economy. Quantitative easing policies can promote economic recovery to a certain extent, and the channel of portfolio rebalancing is also feasible in theory, but there are uncertainties in the factors affecting the economic environment. When solving the problem of high inflation caused by QE and active fiscal policy, it will have a negative impact on the current economy and enterprises. The government also needs to further consider the balance of economic development.
Keywords
COVID-19, quantitative easing, portfolio rebalancing, U.S. economy
References
1. Occhino, F. (2020). “Quantitative easing and direct lending in response to the COVID-19 crisis.” Federal Reserve Bank of Cleveland Working Paper, No. 20-29 (October).
2. Rashid, H., Pitterle, I., & Huang, Z. (2022). The monetary policy response to Covid-19: the role of asset purchase programmes. United Nations Department of Economic and Social Affairs.
3. Nozawa, Y., & Qiu, Y. (2021). Corporate bond market reactions to quantitative easing during the COVID-19 pandemic. Journal of Banking & Finance, 133, 106153.
4. Aloui, D. (2021). The COVID-19 pandemic haunting the transmission of the quantitative easing to the exchange rate. Finance Research Letters, 43, 102025.
5. Clarida, R., Duygan-Bump, B., & Scotti, C. (2021). The COVID-19 crisis and the Federal Reserve's policy response. Board of Governors of the Federal Reserve System.
6. Thorbecke, W. (2020). The impact of the COVID-19 pandemic on the US economy: Evidence from the stock market. Journal of Risk and Financial Management, 13(10), 233.
7. Ugai.H (2007)” Effects of the Quantitative Easing Policy: A Survey of Empirical Analyses. “Monetary and Economic Studies, 2007,(1),1-48.
Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
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- Volume Title
- Proceedings of the 7th International Conference on Economic Management and Green Development
- ISBN (Print)
- 978-1-83558-109-4
- ISBN (Online)
- 978-1-83558-110-0
- Published Date
- 10 November 2023
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/44/20232237
- Copyright
- © 2023 The Author(s)
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited