Enacting efficient markets: The performativity of quantitative easing
Quantitative easing (QE) has been a favourite tool of central banks in their post-financial crisis monetary policy apparatus. Social science literature has interpreted QE as a shift away from performative governance characterising pre-crisis monetary policy. With reference to the Bank of England’s e...
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Cambridge University Press
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| Series: | Finance and Society |
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| Online Access: | https://www.cambridge.org/core/product/identifier/S2059599924000256/type/journal_article |
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| author | Dylan Cassar |
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| author_sort | Dylan Cassar |
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| description | Quantitative easing (QE) has been a favourite tool of central banks in their post-financial crisis monetary policy apparatus. Social science literature has interpreted QE as a shift away from performative governance characterising pre-crisis monetary policy. With reference to the Bank of England’s experience, I offer a reinterpretation of QE as a performative intervention in the conditions of financial markets, as an attempt to alter the state of financial markets away from dysfunctionality and towards efficiency. I claim that, following the financial crisis, the model of complete and efficient markets – a mainstay in central banking prior to the crisis – was transformed from a real-world approximation to a ‘performative object’ to be achieved. In deploying the balance sheet, central banks attempt to performatively enact complete and efficient markets. The article rejects the claim of discontinuity between pre-crisis and post-crisis monetary policy, arguing that QE is a continuation of inflation targeting though with important innovations. While pre-crisis performativity relied on central bankers’ communicative framing of market expectations, QE is performative via the ontological shaping of financial markets, driven by epistemic models. The article relies on a set of 51 interviews with central bankers and financial market participants and a corpus of documents. |
| format | Article |
| id | doaj-art-bb66c247cfba4b939e48b2924f7a3b9e |
| institution | Kabale University |
| issn | 2059-5999 |
| language | English |
| publisher | Cambridge University Press |
| record_format | Article |
| series | Finance and Society |
| spelling | doaj-art-bb66c247cfba4b939e48b2924f7a3b9e2025-01-30T04:24:33ZengCambridge University PressFinance and Society2059-599912010.1017/fas.2024.25Enacting efficient markets: The performativity of quantitative easingDylan Cassar0https://orcid.org/0000-0001-7432-8330University of Malta, Msida, MaltaQuantitative easing (QE) has been a favourite tool of central banks in their post-financial crisis monetary policy apparatus. Social science literature has interpreted QE as a shift away from performative governance characterising pre-crisis monetary policy. With reference to the Bank of England’s experience, I offer a reinterpretation of QE as a performative intervention in the conditions of financial markets, as an attempt to alter the state of financial markets away from dysfunctionality and towards efficiency. I claim that, following the financial crisis, the model of complete and efficient markets – a mainstay in central banking prior to the crisis – was transformed from a real-world approximation to a ‘performative object’ to be achieved. In deploying the balance sheet, central banks attempt to performatively enact complete and efficient markets. The article rejects the claim of discontinuity between pre-crisis and post-crisis monetary policy, arguing that QE is a continuation of inflation targeting though with important innovations. While pre-crisis performativity relied on central bankers’ communicative framing of market expectations, QE is performative via the ontological shaping of financial markets, driven by epistemic models. The article relies on a set of 51 interviews with central bankers and financial market participants and a corpus of documents.https://www.cambridge.org/core/product/identifier/S2059599924000256/type/journal_articlecentral banksfinancial marketsperformativitymonetary policyquantitative easing |
| spellingShingle | Dylan Cassar Enacting efficient markets: The performativity of quantitative easing Finance and Society central banks financial markets performativity monetary policy quantitative easing |
| title | Enacting efficient markets: The performativity of quantitative easing |
| title_full | Enacting efficient markets: The performativity of quantitative easing |
| title_fullStr | Enacting efficient markets: The performativity of quantitative easing |
| title_full_unstemmed | Enacting efficient markets: The performativity of quantitative easing |
| title_short | Enacting efficient markets: The performativity of quantitative easing |
| title_sort | enacting efficient markets the performativity of quantitative easing |
| topic | central banks financial markets performativity monetary policy quantitative easing |
| url | https://www.cambridge.org/core/product/identifier/S2059599924000256/type/journal_article |
| work_keys_str_mv | AT dylancassar enactingefficientmarketstheperformativityofquantitativeeasing |