Interesting paper: http://research.stlouisfed.org/publications/review/10/11/Anderson.pdf CONCLUSION During the past two decades, large increasesâ and decreasesâin central bank balance sheets have become a viable monetary policy tool. His - torically, doubling or tripling a countryâs monetary base was a recipe for certain higher inflation. Often such increases occurred only as part of a failed fiscal policy or, perhaps, as part of a policy to defend the exchange rate. Both economic models and central bank experience during the past two decades suggest that such changes are useful policy tools if the public understands the increase is temporary and if the central bank has some credibility with respect to desiring a low, stable rate of inflation. We find little increased inflation impact from such expansions. For monetary policy, our study suggests several findings: (i) A large increase in a nationâs balance sheet over a short time can be stimulative. (ii) The reasons for the action should be communicated. Inflation expectations do not move if households and firms understand the reason(s) for policy actions so long as the central bank can credibly commit to unwinding the expansion when appropriate. (iii) The type of assets purchased matters less than the balance-sheet expansion. (iv) When the crisis has passed, the balance sheet should be unwound promptly.