00000cam 2200000zi 4500 9.958862 CaOODSP 20260112125025 m o d f cr cn||||||||| 260112t20252025onca ob f000 0 eng d CaOODSP eng rda CaOODSP eng eng fre n-us--- FB3-5/2025-38E-PDF Alpanda, Sami, author. Portfolio rebalancing channel and the effects of large-scale stock and bond purchases / Sami Alpanda, Serdar Kabaca. [Ottawa] : Bank of Canada = Banque du Canada, 2025. ©2025 1 online resource (ii, 55, that is, ii, 54 pages) : colour illustrations. text txt rdacontent computer c rdamedia online resource cr rdacarrier Staff working paper = Document de travail du personnel, 1701-9397 ; 2025-38 ISSN assigned to different series. "Last updated: December 19, 2025." Includes bibliographical references (pages 34-38). "We quantify the effects of large-scale stock purchases by a central bank and compare these to bond purchases, using an estimated dynamic stochastic general equilibrium macro-finance model with nominal and real rigidities and portfolio rebalancing effects. The latter arise from imperfect substitutability between stocks and short- and long-term government bonds in mutual funds' portfolios. Since households' consumption-savings decisions are tied to expected portfolio returns, the required returns on all three assets affect overall demand in the economy. The model shows that the central bank's equity purchases would lower the risk and term premiums on stocks and long-term bonds, respectively, and thereby stimulate economic activity. Since stocks comprise a larger share in asset portfolios and are less substitutable for short-term securities than long-term bonds are, the effects of stock purchases on aggregate demand are larger than those of similar-sized bond purchases"--Abstract, page ii. Includes abstracts in English and French. Quantitative easing (Monetary policy) United States Econometric models. Transmission mechanism (Monetary policy) United States Econometric models. Assouplissement quantitatif (Politique monétaire) États-Unis Modèles économétriques. Mécanismes de transmission (Politique monétaire) États-Unis Modèles économétriques. Bank of Canada, issuing body. Staff working paper (Bank of Canada) 2025-38. (CaOODSP)9.806221 PDF 3.93 MB https://publications.gc.ca/collections/collection_2026/banque-bank-canada/FB3-5-2025-38-eng.pdf