Evaluating the Effects of Quantitative Easing in the UK Using the Synthetic Control Method
|Author:||Bc. Vojtěch Molnár|
|Year:||2017 - summer|
|Leaders:|| doc. PhDr. Tomáš Havránek Ph.D.
|Work type:|| Bachelors
|Awards and prizes:||B.A. with distinction from the Director of IES FSV UK for an extraordinarily good bachelors diploma thesis.|
|Abstract:||The thesis deals with quantitative easing (QE)—unconventional monetary
policy, which was conducted by several central banks in the aftermath of
recent financial crisis. Its goal is to boost the economy and to reach inflation
target with key interest rates being already close to zero. The United
Kingdom was one of the countries involved: Bank of England was conducting
the policy in 2009-2012. The first part of the thesis focuses on quantitative
easing in more detail; the policy is described in general, but special emphasis
is put on Bank of England. The second part uses synthetic control method
to estimate effect of the policy on real GDP and inflation of the United Kingdom.
The method does not lead to construction of appropriate control unit
for GDP of the UK under unusual circumstances of the financial crisis. Positive
effect of quantitative easing on inflation is found, but its magnitude is
surrounded by large uncertainty.