Coronavirus: Effects of the massive monetary expansion – Natixis
|Economists at Natixis analyze the consequences of the massive monetary expansion in response to the coronavirus crisis in OECD countries.
Key quotes
“It will not increase inflation, due to the disappearance of the link between the money supply and prices.”
“It will not make exchange rates move much, because all countries are conducting the same expansionary monetary policy.”
“It will have little effect initially: if demand for money increases as much as the money supply in the short-term, this increase in the money supply will have no effect on the prices of other assets because the crisis will lead savers to hold monetary assets.”
“In the medium-term, it will lead to lower long-term interest rates and higher share prices and real estate prices.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.