We do not yet have a full formal model of these mechanisms, but this is no justification for not giving them serious consideration, or for focusing on one of them in isolation while ignoring the rest. Ongoing research at the Bank of Italy tries to build up this “general equilibrium” view from micro data.
The project examines the impact of unconventional monetary measures on a large number of variables in individual Italian households’ balance sheets.9 The main finding is that the traditional effects of monetary policy via activity and employment have prevailed even during the global crisis.