The Regulatory Debate Regarding Quantitative Easing and Systemic Risk

Project Start:02/2016
Researchers:Vanessa Endrejat, Jan Pieter Krahnen, Matthias Max Nagel, Christian Resch, Matthias Thiemann
Category: Financial Markets, Macro Finance
Funded by:Volkswagen Stiftung

On the one hand, regulators and politicians from developing countries have criticized excessive Quantitative Easing by developed countries as exacerbating volatility and speculation in emerging markets. On the other hand, developed countries have pointed to the lack of evidence regarding this stipulation. In this respect, Quantitative Easing represents a coordination problem for policy makers whose primary mandate is domestic and who thus face different pay-offs of the chosen policy tools. This project investigates the debate on Quantitative Easing and the attempt of developing countries to make developed countries internalize the negative effects of Quantitative Easing from an actor-network theory perspective (Callon 1998).

The team starts by investigating the technical research which underlies the differential views on Quantitative Easing and the academic debate about this question. Using these insights negotiations between different Central Banks regarding the effect of Quantitative Easing, using documentary analysis as well as semi-structured expert interviews, will be investigated.