How Do Economic Experts Worldwide Evaluate the Effects of Government Bond Purchases by Central Banks? – Results of the Latest Ifo World Economic Survey

As a reaction to the 2007/08 financial and economic crisis, the central banks of the world’s leading economic and currency areas were compelled to reduce their base rates drastically. In areas where it was no longer possible to stimulate the economy with further interest rate cuts because the 0% threshold had already been reached, monetary policy made greater use of unconventional methods, and especially of large-scale purchases of private and public sector debt securities. In this context there is a controversial debate primarily about the massive purchases of government bonds on the secondary market. A special question featured in the Ifo World Economic Survey shows that assessments of the mid-term and long-term dangers of this form of monetary policy vary tremendously across the world.