Discussion of “QE 1 vs. 2 vs. 3. . . :A Framework for Analyzing Large-Scale Asset Purchases as a Monetary Policy Tool”

This is a useful paper, for three reasons. First, as a partial equilibrium contribution, it offers a nice and tractable characterization of bank intermediation, rich enough to capture many of the mechanisms central to the crisis. Second, as a general equilibrium contribution, the assumptions used to integrate the model of banks in a general equilibrium setting lead to an elegant closure (although some of the assumptions, such as exogenous entry and exit of banks, make calibration even more of an art than usual). Third, as a contribution to the issue at hand, namely the role and the scope of targeted easing, the framework is the right one to start addressing the issues.