Unconventional Monetary Policy and the Great Recession: Estimating the Macroeconomic Effects of a Spread Compression at the Zero Lower Bound

We explore the macroeconomic effects of a compression in the long-term bond yield spread within the context of the Great Recession of 2007–09 via a time-varying parameter structural VAR model. We identify a “pure” spread shock defined as a shock that leaves the policy rate unchanged, which allows us to characterize the macroeconomic consequences of a decline in the yield spread induced by central banks’ asset purchases within an environment in which the policy rate is constrained by the effective zero lower bound. Two key findings stand out. First, compressions in the long-term yield spread exert a powerful effect on both output growth and inflation. Second, conditional on available estimates of the impact of the Federal Reserve’s and the Bank of England’s asset purchase programs on long-term yield spreads, our counterfactual simulations suggest that U.S. and U.K. unconventional monetary policy actions have averted significant risks both of deflation and of output collapses comparable to those that took place during the Great Depression.

Cost-effectiveness of percutaneous coronary intervention in patients with stable coronary artery disease and abnormal fractional flow reserve

BACKGROUND The Fractional Flow Reserve Versus Angiography for Multivessel Evaluation (FAME) 2 trial demonstrated a significant reduction in subsequent coronary revascularization among patients with stable angina and at least 1 coronary lesion with a fractional flow reserve ≤0.80 who were randomized to percutaneous coronary intervention (PCI) compared with best medical therapy. The economic and quality-of-life implications of PCI in the setting of an abnormal fractional flow reserve are unknown. METHODS AND RESULTS We calculated the cost of the index hospitalization based on initial resource use and follow-up costs based on Medicare reimbursements. We assessed patient utility using the EQ-5D health survey with US weights at baseline and 1 month and projected quality-adjusted life-years assuming a linear decline over 3 years in the 1-month utility improvements. We calculated the incremental cost-effectiveness ratio based on cumulative costs over 12 months. Initial costs were significantly higher for PCI in the setting of an abnormal fractional flow reserve than with medical therapy ($9927 versus $3900, P<0.001), but the $6027 difference narrowed over 1-year follow-up to $2883 (P<0.001), mostly because of the cost of subsequent revascularization procedures. Patient utility was improved more at 1 month with PCI than with medical therapy (0.054 versus 0.001 units, P<0.001). The incremental cost-effectiveness ratio of PCI was $36 000 per quality-adjusted life-year, which was robust in bootstrap replications and in sensitivity analyses. CONCLUSIONS PCI of coronary lesions with reduced fractional flow reserve improves outcomes and appears economically attractive compared with best medical therapy among patients with stable angina.

Fractional flow reserve-guided PCI versus medical therapy in stable coronary disease

The preferred initial treatment for patients with stable coronary artery disease is the best available medical therapy. We hypothesized that in patients with functionally significant stenoses, as determined by measurement of fractional flow reserve (FFR), percutaneous coronary intervention (PCI) plus the best available medical therapy would be superior to the best available medical therapy alone.

Percutaneous coronary intervention for stable coronary artery disease

Patients with significant coronary artery stenoses are at increased risk of future cardiac events. However, in the absence of acute coronary syndrome or recent myocardial infarction and residual ischemia, elective percutaneous coronary intervention has not been shown to improve prognosis. Possible explanations for this might be the limited follow-up time adopted by most randomized trials comparing percutaneous coronary intervention with medical therapy, limited number of patients with proven ischemia enrolled in these trials, and adoption of complex, elaborate techniques that have not proved their usefulness. Published evidence identifies certain indications for percutaneous coronary intervention in patients with stable coronary lesions: demonstration of significant inducible ischemia, particularly in the context of a recent myocardial infarction; detection of unequivocally reduced fractional flow reserve; and specific angiographic features of coronary stenoses. Operators should take into account long-term consequences of adopted techniques rather than immediate angiographic results. We review existing evidence and provide our recommendations in this setting.