Jiayi Cheng
ABSTRACT
This paper firstly evaluates the use of two unconventional monetary policies (UMPs), forward guidance and quantitative easing, with their strengths and effective applications respectively. Besides, factors that influence the effectiveness of the two policies are being analyzed, thereby allowing us to predict how their effectiveness will be in a foreseeable future according to the changes in the factors. In this work, we find out that these factors have reduced the effectiveness of the two UMPs recently. Due to its weakened effectiveness, we made a conclusion that the two policies should not be considered as ‘a new normal’.
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