November 19, 2020 | News

Vega experts, Dr. Marco Di Maggio and Dr. Christopher Palmer, recently published a study showing that a quantitative easing program allowed households to spend more during the most recent recession, which may be relevant to the current economic climate following the COVID-19 shutdowns. The study found that when U.S. Federal Reserve purchased massive amounts of mortgage-backed securities (a form of quantitative easing) it drove down mortgage interest rates, allowed consumers to refinance their house loans and spend more on everyday items, and in turn bolstered the economy.  

The paper, “How Quantitative Easing Works: Evidence on the Refinancing Channel,” was published in one of the top economic journals, Review of Economic Studies, with their co-author Amir Kermani. 

For more information about Professor Di Maggio or Professor Palmer, please email experts@vegaeconomics.com.