limited to the asset classes included in our app, but have spilled over to other market segments ( charts 3 and 4 ). in addition, easier market funding conditions have been passed through to bank lending rates. 6importantly, these findings are based on a range of econometric techniques and are therefore robust to the limitations associated with any individual methodology. 5 / 22 bis central bankers'speeches sources : ecb, ecb calculations. 7 event studies – which measure the impact of central banks ’ bond purchases in a narrow interval 6 / 22 bis central bankers'speeches around the time of the announcement – play a part in informing our view on the efficacy of our purchases. but we also use model counterfactuals to complement the impact metrics that we derive from event studies, and to test whether or not the impact of our announcements endures beyond the very short term. in this context, dynamic term structure models of the type that have become standard in contemporary fixed income finance, augmented with a factor capturing central bank bond holdings, have consistently confirmed the inference we draw from event studies. they indicate that our purchases have had a sizeable and durable influence on longterm yields. 8 at present, the current and anticipated size of our app portfolio – which has been increased in various recalibration steps and is expected to be maintained “ for an extended period of time ” after the end of net asset purchases – is still putting downward pressure on euro area long - term yields. the longer the expected period of reinvestment, the stronger the downward pressure on yields. if one takes current surveys of market participants ’ views about the time over which the ecb is anticipated to roll over its app securities, and assumes the modal expectation of a twoyear period, one finds that the downward pressure that app asset holdings – current and expected – are exerting on longer - term interest rates is in the order of 100 basis points ( chart 5 ). 7 / 22 bis central bankers'speeches source : eser, lemke, nyholm, radde, and vladu ( mimeo ). 9 downward pressure on yields is expected to be very persistent and to decline only gradually, but consistently, as we move forward in time, because of what is referred to as the “ portfolio ageing ” effect. the effects of our purchases of long - dated assets on market yields are principally due to the fact that we withdraw duration from private hands, and as the securities we hold

with caution, but they are useful to explain the different channels at work. to illustrate the potential effects of rising protectionism, i do not want to dwell on the specifics of the tariffs currently being discussed. this would miss the bigger picture. i rather want to consider a hypothetical scenario where the united states raises tariffs on all imports of goods by 10 percentage points, and its trading partners impose the equivalent on us exports. according to our model simulations, such a scenario would have significant adverse effects on the global economy, including, and in particular, on the economy that raises tariffs in the first place. specifically, real economic activity in the united states could be up to 2½ % lower than in the baseline in the first year alone. the reasons are essentially threefold : first, if domestic and imported goods cannot be easily and readily substituted, higher import prices increase firms ’ production costs and reduce households ’ purchasing power. these effects weigh on consumption, investment and employment, resulting in a material overall negative impact on gdp. second, in addition to the direct adverse price effects, the uncertainty about growth prospects is likely to cause consumers to delay expenditure and businesses to postpone investment. 4 see e. g. bloom, n. ( 2009 ), “ the impact of uncertainty shocks ”, econometrica, 77 ( 3 ) : 623 – 685. much will depend on how consumers and businesses react, but ecb simulations suggest that such uncertainty and confidence effects could account for around one - third of the overall effect in the first year. in addition, financial investors react to uncertainty by selling equities, reducing credit and demanding higher compensation for risk. this in turn reduces wealth, increases the cost of investing and further discourages demand. and third, economic activity declines as us exports are hit by the tariffs abroad, which is only partially offset by lower imports. 2 / 5 bis central bankers'speeches in short, even though one may argue about the relative contributions of each of these channels, and the overall effect on economic activity, qualitatively the results are unambiguous : an economy imposing a tariff which is retaliated by other countries would clearly be worse off. its living standards would fall and jobs would be lost. the effects on other economies would primarily depend on their size, trade openness and how much they trade with the tariff - imposing country. naturally, the economies that have the closest trade relations with that country would be the most negatively affected. but the effects