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.

Mindfulness-based cognitive therapie for depression (MBCT) in clinical practice - baseline patient characteristics, process and outcome

Introduction: Mindfulness based cognitive therapy for depression (MBCT) has shown to be effective for the reduction of depressive relapse. However, additional information regarding baseline patient characteristics and process features related to positive response could be helpful both for the provision of MBCT in clinical practice, as well as for its further development. Method: Baseline characteristics, process data, and immediate outcome (symptom change, change in attitudes and trait mindfulness) of 108 patients receiving MBCT in routine care were recorded. A newly developed self-report measure (Daily Mindfulness Scale, DMS) was applied daily during the MBCT program. Additionally, patients filed daily reports on their mindfulness practice. There was no control group available. Results: Patients with more severe initial symptoms indicated greater amounts of symptom improvement, but did not show great rates of dropout from the MBCT intervention. Younger age was related to higher rates of dropout. Contradictory to some previous data, patients with lower levels of initial trait mindfulness showed greater improvement in symptoms, even after controlling for initial levels of symptoms. Adherence to daily mindfulness practice was high. Consistent with this result, the duration of daily mindfulness practice was not related to immediate outcome. Process studies using multivariate time series analysis revealed a specific role of daily mindfulness in reducing subsequent negative mood. Conclusions: Within the range of patient present in this study and the given study design, results support the use of MBCT in more heterogeneous groups. This demanding intervention was well tolerated by patients with higher levels of symptoms, and resulted in significant improvements regarding residual symptoms. Process-outcome analyses of initial trait mindfulness and daily mindfulness both support the crucial role of changes in mindfulness for the effects of MBCT.