2015年-CEPS欧洲政策研究中心_The_QE_Placebo_4页_543kb

The QE Placebo: A Critical Analysis

Core Content

This commentary by Daniel Gros, published on 12 June 2015, critically examines the European Central Bank's (ECB) decision to implement a quantitative easing (QE) programme, which involved purchasing €1.1 trillion worth of eurozone government bonds. Gros argues that the ECB's QE policy, while resembling the strategies of other central banks such as the US Federal Reserve, Bank of England, and Bank of Japan, has not had the intended long-term impact on inflation and economic growth.

Main Views

1. QE as a Placebo Effect

• The ECB's QE programme was initially presented as an extension of an existing asset-purchase programme, but in reality, it marked a significant shift in policy.
• The ECB explicitly avoids financing governments, yet the large-scale purchase of government bonds is seen as a departure from this principle.
• Gros suggests that the ECB's QE may be more of a "placebo" than an effective tool, as it has not produced the desired long-term outcomes.

2. Impact on Interest Rates

• The announcement of QE led to a sharp decline in interest rates, but this was largely due to market expectations rather than the actual execution of the programme.
• After the initial drop, interest rates rebounded and returned to pre-QE levels, indicating that the programme may not have had a sustained effect.

3. Inflation Expectations and QE's Role

• The ECB measures the success of QE based on inflation expectations over the next five to ten years, derived from bond prices.
• However, Gros highlights that these expectations are not reliable indicators of future inflation, as they are influenced by other factors, such as oil prices.
• The five-year forward inflation rate has been affected by the oil-price recovery, which may have been a more significant factor in its change than the QE programme itself.

4. Contradictions in QE Justification

• QE is supposed to work through "portfolio balance effects," which suggest that investors do not always act rationally and may not fully respond to market signals.
• Yet, the ECB uses market prices as a benchmark for assessing the impact of QE, creating a contradiction in its reasoning.
• Gros criticizes the tendency of QE supporters to attribute interest rate declines to expectations of QE, while ignoring the corresponding decline in inflation expectations.

5. Lack of Economic Impact

• Despite the ECB's efforts, there has been no significant increase in inflation or economic growth.
• Central banks' QE policies have failed to produce a noticeable effect on broader economic indicators, suggesting that the strategy may be ineffective in the current context.

6. Pragmatic Thinking is Missing

• The debate around QE has become polarized, with each side exaggerating the other's position.
• Gros argues that this lack of balanced analysis undermines the credibility of QE as a policy tool.

Key Information

• QE Programme: The ECB's programme involved purchasing €1.1 trillion of eurozone government bonds.
• Timeframe: The programme was announced in January 2015 and began in March 2015.
• Inflation Target: The ECB aims to bring inflation close to 2%.
• Market Reaction: Interest rates fell sharply after the announcement but rebounded to pre-QE levels.
• Inflation Expectations: These have returned to levels seen in the summer of 2014, with no lasting impact from QE.
• Oil Prices Influence: The five-year forward inflation rate is correlated with oil prices, suggesting external factors may have played a larger role in its movement.
• Author: Daniel Gros, Director of CEPS (Center for European Policy Studies).
• Related Publications: Several CEPS publications and a paper commissioned by the European Parliament provide further context and analysis on QE in the eurozone.

Conclusion

Gros concludes that the ECB's QE programme has not produced the expected results, and that the policy's effectiveness remains difficult to assess. He emphasizes the need for more pragmatic and balanced discussions on QE, rather than relying on flawed assumptions and biased interpretations.