01913cas a2200253 a 4500 AALejournalIMF018427 230101c9999 xx r poo 0 0eng d 5.00 USD 9781484353677 1018-5941 BD-DhAAL BD-DhAAL Han, Fei. Scarcity Effects of Quantitative Easing on Market Liquidity : Evidence from the Japanese Government Bond Market / Fei Han, Dulani Seneviratne. Washington, D.C. : International Monetary Fund, 2018. 1 online resource (43 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Quantitative easing could improve market liquidity through many channels such as relaxing bank funding constraints, increasing risk appetite, and facilitating trades. However, it can also reduce market liquidity when the increase in the central bank's holdings of certain securities leads to a scarcity of those securities and hence higher search costs in the market. Using security-level data from the Japanese government bond (JGB) market, this paper finds evidence of the scarcity (flow) effects of the Bank of Japan (BOJ)'s JGB purchases on market liquidity. Moreover, we also find evidence that such scarcity effects could dominate other effects when the share of the BOJ's holdings exceeds certain thresholds, suggesting that the flow effects may also depend on the stock. Mode of access: Internet Seneviratne, Dulani. IMF Working Papers; Working Paper ; No. 2018/096 Full text available on IMF http://elibrary.imf.org/view/journals/001/2018/096/001.2018.issue-096-en.xml IMF e-Library