Part of the potency of quantitative easing could derive from a non-rational “behavioural channel”, according to lab experiments detailed in a recent Banque de France working paper.

The team of researchers notes that under the “textbook expectations hypothesis” of the yield curve, QE may have no impact if the expected path of the policy interest rate does not change. This implies QE would not affect output, employment or wages.

In an earlier experiment, the team identified the presence of a