MACRO ECONOMIC EFFECTS OF THE EUROPEAN CENTRAL BANK'S ASSET PURCHASE PROGRAMS

Year 2021, Volume: 11 Issue: 4, 2226 - 2240, 31.12.2021

Cemil Erarslan , Ferhat Pehlivanoğlu , Zeynep Narman

Abstract

The fact that the effects of the European Debt Crisis in the Eurozone countries in the period 2008/2009 were much greater than the previous financial and economic crises forced the European Central Bank to take very different measures than the traditional monetary policies followed by increasing the amount of money and lowering interest rates. In this context, the European Central Bank tried to increase the efficiency of the monetary transmission mechanism by announcing asset purchase programs and to compensate for the negative consequences of the financial crisis on the real economy. In the study, the effects of asset purchase programs on the variables of average inflation, GDP growth, interest rates, unemployment and employment rates in the Eurozone member countries for the period 2009: 5-2020: 11 were investigated. Accordingly, it has been observed that the biggest macroeconomic effects of the European Central Bank's asset purchase programs in the Eurozone are unemployment rates, employment rates, GDP, interest rates and inflation rates in the long run, respectively. It has been found that the unconventional monetary policies implemented by the European Central Bank through asset purchase programs are effective in reducing long-term unemployment rates and increasing employment rates and GDP in the Eurozone.

Keywords

European Central Bank, Asset Purchase Programs, Unconventional Monetary Policy Tools, Debt Crisis, Financial Stability.

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