Author ORCID Identifier
https://orcid.org/0009-0007-0946-2868 : Ashiqur Rahman
QE, Monetary Policy, Asset Purchases, Bank of Canada, Canadian Financial Market.
This empirical study examines the effects of quantitative easing (QE) on the Canadian financial market. Specifically, the study focuses on the Bank of Canada's Government of Canada Bond Purchase Program (GBPP), conducted during COVID-19 between 2020 and 2022. I use two analytical methods, e.g., event study and time series analysis, to quantify the impact of the Bank of Canada's large asset purchases on the 10-year government bond yield's term premium. The results indicate that the Bank of Canada's $260 billion asset purchases in 2020 would reduce the 10-year term premium by 34 basis points, which suggests the significant impact of quantitative easing on the term premium. Furthermore, the study finds that QE has a portfolio balance effect by reducing the yields on other non-government assets. The findings of this study constitute a significant contribution to the current discourse regarding the use of QE as a monetary policy tool and have implications for future policy decisions related to monetary policy in the Canadian economy.
Master of Arts
Major Research Paper