Joseph E. Gagnon and Brian Sack: QE: A User's Guide: "Cen...

Joseph E. Gagnon and Brian Sack: QE: A User's Guide: "Central banks should characterize QE in terms of the stock of long-term asset holdings and should announce purchases of assets in discrete increments that are designed to deliver macroeconomic stimulus equivalent to the policy rate cut that they would otherwise desire to implement...

...QFor the United States and some other countries, research suggests that a purchase of long-term bonds equivalent to 1.5 percent of GDP [300 billion dollars] has a stimulative effect roughly equal to a cut in the policy rate of 0.25 percentage point. Moreover, central banks should convey that these adjustments will be made under a policy approach that responds routinely to economic developments and displays considerable inertia, as has typically been the case with the conventional policy interest rate...

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