Early asset purchases much more successful – BIS paper

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The Fed only recently began shrinking its balance sheet

Asset purchase programmes become much less powerful after the initial shock wears off, raising questions as to the policies’ value over long periods of time, a working paper published by the Bank for International Settlements finds.

Henning Hesse, Boris Hofmann and James Weber set out to assess how the effectiveness of asset purchases changes over time, an area of the literature they say is still limited. Their approach makes use of a Bayesian vector autoregression to study the programmes of

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