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


Open Access | Article

The Impact and Issues of Portfolio Rebalancing Channel in Quantitative Easing During COVID-19

Zheng Yan * 1
1 Johns Hopkins University

* Author to whom correspondence should be addressed.

Advances in Economics, Management and Political Sciences, Vol. 44, 227-231
Published 10 November 2023. © 2023 The Author(s). Published by EWA Publishing
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.
Citation Zheng Yan. The Impact and Issues of Portfolio Rebalancing Channel in Quantitative Easing During COVID-19. AEMPS (2023) Vol. 44: 227-231. DOI: 10.54254/2754-1169/44/20232237.

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
10 November 2023
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

Copyright © 2023 EWA Publishing. Unless Otherwise Stated