Skip to main content
main-content
Top

Hint

Swipe to navigate through the articles of this issue

27-05-2020 | Original Article | Issue 3/2020 Open Access

Schmalenbach Business Review 3/2020

Capital Market Equilibrium With Imperfect Competition: The Case of the ECB’s Asset Purchase Programme

Journal:
Schmalenbach Business Review > Issue 3/2020
Authors:
Christian Koziol, Werner Neus
Important notes

Publisher’s Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Abstract

We set up a multiperiod, CAPM-type model with imperfect competition between investors in case of an additional price-insensitive market participant. The motivation for this additional actor comes from the ECB’s announcement to buy a substantial amount of securities “whatever it takes” which reflects the willingness to trade in a entirely price-inelastic way. Our model explains the effects on demand functions, equilibrium prices, portfolio holdings and investors’ expected utility. The interaction of price-inelastic additional demand by the ECB, on the one hand, and imperfect competition, on the other hand, causes differentiated results regarding timing strategies, development of prices over time, and utility implications.
Literature
About this article

Other articles of this Issue 3/2020

Schmalenbach Business Review 3/2020 Go to the issue

Premium Partner

    Image Credits