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Bank of Japan Equity Purchases: The (Non-)Effects of Extreme Quantitative Easing / Ben Charoenwong, Randall Morck, Yupana Wiwattanakantang.
- Format:
- Book
- Author/Creator:
- Charoenwong, Ben.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w25525.
- NBER working paper series no. w25525
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Bank of Japan Equity Purchases
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2019.
- Summary:
- From January 2011 through March 2018, the Bank of Japan purchased equity index ETFs worth about 3.5% of GDP. Identification of the effect of central bank ETF purchases on stock valuations and corporate responses is via differently-weighted and changing stock indices. BOJ purchases lift valuations, increase share issuances, and increase total assets. On average, the latter increase is due to cash and short-term securities rather than capital investment. However, firms with worse corporate governance do increase capital investment. These findings suggest central bank equity purchases are a problematic tool for stimulating economic growth through high broad-based private-sector corporate investment.
- Notes:
- Print version record
- February 2019.
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