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The Monetary Policy Response to the Pandemic Emergency (ECB Blog, 12 min read) ECB executive board member Phillip Lane writes that the ECB estimates a contraction of GDP between 5 and 12% this year. To boost demand and protect the productive capacity of the economy, they deemed further easing of the interest rate on TLTRO III (from June 2020 to June 2021) to be essential.
The Case for Deeply Negative Interest Rates (Project Syndicate, 6 min read) Kenneth Rogoff argues this would prevent defaults (with less need of debt structuring, too), increase aggregate demand, lower unemployment, and help EMs with their current economic distress stemming from capital flight. He believes significant measures would have to be taken first to ensure no cash hoarding, which in effect prevents the policy transmitting smoothly.
International Spillovers of Quantitative Easing (VoxEU, 7 min read) QE policy in an advanced economy can transmit internationally. In the short term, QE can reduce the competitiveness of other economies via exchange rate adjustment; but in the long run, it can stabilize and boost an economy via demand channel.