Working Paper: CEPR ID: DP17998
Authors: Brian Fabo; Martina Jancokova; Elisabeth Kempf; Lubo Pstor
Abstract: Fabo, Jancokova, Kempf, and Pastor (2021) show that papers written by central bank researchers find quantitative easing (QE) to be more effective than papers written by academics. Weale and Wieladek (2022) show that a subset of these results lose statistical significance when OLS regressions are replaced by regressions that downweight outliers. We examine those outliers and find no reason to downweight them. Most of them represent estimates from influential central bank papers published in respectable academic journals. For example, among the five papers finding the largest peak effect of QE on output, all five are published in high-quality journals (Journal of Monetary Economics, Journal of Money, Credit and Banking, and Applied Economics Letters), and their average number of citations is well over 200. Moreover, we show that these papers have supported policy communication by the world's leading central banks and shaped the public perception of the effectiveness of QE. New evidence based on quantile regressions further supports the results in Fabo et al. (2021).
Keywords: Economic Research; Quantitative Easing; QE; Central Bank; Career Concerns
JEL Codes: A11; E52; E58; G28
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Author affiliation (central bank) (E58) | Reported effectiveness of QE (E52) |
| Outliers from influential central bank studies (E58) | Need for downweighting (C46) |
| Central bank studies (E58) | Public perception and policy communication regarding QE (E60) |
| Author affiliation (central bank) (E58) | Estimated effects of QE across various quantiles (C22) |