IMF Economic Review

, Volume 67, Issue 2, pp 315–348 | Cite as

Domestic and International Effects of the Eurosystem Expanded Asset Purchase Programme: A Structural Model-Based Analysis

  • Pietro CovaEmail author
  • Patrizio Pagano
  • Massimiliano Pisani
Research Article


This paper evaluates the domestic and international macroeconomic effects of the Eurosystem’s Asset Purchase Programme (APP) by means of a calibrated three-country dynamic general equilibrium model of the world economy. We find that the APP boosts domestic inflation and economic activity as liquidity increases and long-term interest rates fall. International spillovers are expansionary, and their size depends on the monetary policy stance of partner countries and on the response of international relative prices.

JEL Classification

E44 E52 E58 



The opinions expressed are those of the authors and do not reflect views of the Bank of Italy or the World Bank. Any remaining errors are the sole responsibility of the authors.


We would like to thank for insightful comments Pau Rabanal of the editorial board and two anonymous referees. We have also benefited from discussions with Lorenzo Burlon, Giancarlo Corsetti, Alberto Locarno, Alessandro Notarpietro, Fabrizio Perri, Alfonso Rosolia, Enrico Sette, colleagues of the Monetary Analysis Division, and participants at the July meeting of the Monetary Policy Committee (2015), and Bank of Italy lunch seminar (2015).

Supplementary material

41308_2018_71_MOESM1_ESM.pdf (493 kb)
Supplementary material 1 (PDF 494 KB)


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Copyright information

© International Monetary Fund 2019

Authors and Affiliations

  • Pietro Cova
    • 1
    Email author
  • Patrizio Pagano
    • 2
  • Massimiliano Pisani
    • 1
  1. 1.Directorate General for Economics Statistics and Research, Modelling and Forecasting DivisionBank of ItalyRomeItaly
  2. 2.Executive Director - EDS21World BankWashingtonUSA

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