On 29-30 March 2016 the Bank of Italy hosted the Fourth Economic Outlook and Monetary Policy Directorate Internal Workshop, which this year addressed the theme “Unconventional monetary policy: Effectiveness and risks.”
The event featured fourteen presentations (all with discussion), distributed over six sessions. The works presented in the first session focused on the effectiveness of the recent unconventional monetary policy measures; the second session explored their redistributive consequences; the third session was devoted to analyzing the portfolio rebalancing effect, both within the area and in the broader international context; the papers presented in the fourth session proposed different methods to detect asset overvaluation and the possible emergence of bubbles due to the impact of the unconventional measures on asset prices; the fifth session assessed the market response to the announcements of unconventional measures, distinguishing between positive and negative surprises; the papers presented in the last session focused on the effects of exiting prematurely from unconventional policies. Overall, the contributions of the workshop highlighted the effectiveness of the measures recently adopted in the euro area in affecting the yields of financial assets and inducing a portfolio rebalancing, thus leading to an improvement in the growth and inflation outlook, with no undesirable redistributive consequences nor clear risks of asset price bubbles. The effectiveness of the measures is nonetheless conditional on the purchase programme having appropriate size and duration.
Some of the papers presented in the workshop will soon be circulated as Working Papers (Temi di Discussione) of the Bank of Italy, following the regular refereeing process.