Comparison of Unconventional Monetary Policies in the United States and Europe

Abstract

2020 In the year, the global public health event hit the real economy, and traditional monetary policy regulation was in an awkward
situation. The monetary authorities of many countries resumed unconventional monetary policies (UMP). The UMP has had a positive effect
on the economies of the United States and Europe in the last two global crises. This paper establishes the TPP-VAR model based on the data
of the United States and the Eurozone after January 2018. The research finds that in crisis management, UMP is usually more effective than
conventional monetary policy. When the economy is in severe turmoil, UMP can prevent economic recession, promote recovery, optimize financing conditions and enhance the effectiveness of the policy system. The impact of quantitative easing policies has a lag, and the policy lag
of the European Central Bank is even stronger. In the post-pandemic era, ultra-large-scale quantitative easing policies have played a major
role. The regulatory effect of the UMP needs to be flexibly combined with forward-looking guidance and new reversal operations. The form
of the Federal Reserve and the European Central Bank’s UMP is largely the same, but the effects of the same type of policy vary in different
economic environments.