The Advent and Use of Quantitative Easing in the Euro Area: Empirical Evidence of its Real Macroeconomic Impacts from the European Central Bank

After the recent Global Financial and European Debt Crises, deflation threated the world economy and aggregate demand was at its lowest rate since decades. In order to boost these key macroeconomic variables, a majority of Central Banks thought appropriate to apply unconventional monetary policies, as they were used to it after the Great Depression of 1929 and the Japan Financial Crisis in the 90s. Two major policies have been set up: slashing interest rates to the zero-lower bound and using quantitative easing. This thesis investigates the raise of this latter, the potential side effects and real macroeconomic impacts of the ECB’s QE programme: “the Asset Purchasing Programme”. Regarding the results, these macroeconomic impacts seem to be limited and the exchange rate seems to be a better transmission channel than the portfolio rebalancing one. The effectiveness of the ECB’s QE programme is therefore put into question.