The effects of the ECB’s pandemic-related monetary policy measures

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Title: The effects of the ECB’s pandemic-related monetary policy measures
Author: Nelimarkka, Jaakko ; Laine, Olli-Matti
Organization: Bank of Finland
Series: BoF Economics Review
Series number: 4/2021
Year of publication: 2021
Publication date: 1.9.2021
Pages: 33
Subject (yso): rahapolitiikka; pandemiat
Keywords: COVID-19; EKP
JEL: C32; C54; E43; E52; E58
Other keywords: monetary policy; ECB; structural VAR; policy evaluation
Abstract: We assess the macroeconomic impact of pandemic-related monetary policy measures of the ECB. Conditioning on counterfactual interest rate paths that would have materialised in the absence of the policies, the macroeconomic effects are measured using structural vector autoregressions. In the framework, multiple monetary policy measures may simultaneously be analysed. According to our results, the asset purchase programmes implemented during the crisis have increased the annual GDP growth by approximate 2 percentage points in 2020–2021 and inflation by 0.5 percentage points. The longer-term refinancing operations have contributed positively but more mildly to the economic activity.

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