are directly linked to the outstanding quantity of assets, dates back to the early 1950s. 4 for example, in preferred - habitat models, short - and long - term assets are imperfect substitutes in investors ’ portfolios, and the effect of arbitrageurs is limited by their risk aversion or by market frictions such as capital constraints. consequently, the term structure of interest rates can be influenced by exogenous shocks in supply and demand at specific maturities. purchases of longer - term securities by the central bank can be viewed as a shift in supply that tends to push up the prices and drive down the yields on those securities. in the context of such an analytical framework, the effect of an asset purchase program also depends on investors ’ perceptions of the future path of short - term interest rates as well as their perceptions of the timing and pace of the central bank ’ s eventual unwinding of its asset purchases. thus, central bank communication may play a key role in influencing the financial market response to such a program. recent empirical work provides a rough gauge of the quantitative effects of longer - term securities purchases. 5 for example, event studies have investigated the short - term response of asset prices to announcements by the federal reserve and the bank of england regarding their respective asset purchase programs. and regression analysis has been used to estimate statistical models that embed predictions from a specific theoretical framework. table 1 summarizes the response of selected financial variables on four dates associated with the federal reserve ’ s first round of asset purchases. on november 25, 2008, the federal reserve announced that it would purchase up to $ 600 billion in agency mortgagebacked securities ( mbs ) and agency debt. on december 1, chairman bernanke provided further details in a speech. 6 on december 16, the program was formally launched by the fomc. 7 on march 18, 2009, the fomc announced that the program would be expanded by an additional $ 850 billion in purchases of agency mbs and agency debt and $ 300 billion in purchases of treasury securities. as is evident from the table, these announcements were generally associated with a substantial decline in the 10 - year treasury yield and the yield on 10 - year treasury inflation - protected securities ( tips ) as well as in rates on agency mbs and corporate debt. turning now to the macroeconomic effects of the federal reserve ’ s securities purchases, there are several distinct channels through which these purchases tend to influence aggregate demand, including a reduced cost of credit

october ), available a t www. dnb. nl / en / publications / research - publications / occasional - studies / nr - 7 - 2018 - an - energy - transition - riskstress - test - for - the - financial - system - of - the - netherlands. return to text 14 for instance, see melissa dell, benjamin f. jones, and benjamin a. olken ( 2012 ), “ temperature shocks and economic growth : evidence from the last half century, " american economic journal : macroeconomics, vol. 4 ( july ), pp. 66 – 95 ; solomon hsiang, robert kopp, amir jina, james rising, michael delgado, shashank mohan, d. j. rasmussen, robert muir - wood, paul wilson, michael oppenheimer, kate larsen, and trevor houser ( 2017 ), “ estimating economic damage from climate change in the united states, " science, vol. 356 ( june ), pp. 1362 – 69 ; and maximilian auffhammer ( 2018 ), “ quantifying economic damages from climate change, " journal of economic perspectives, vol. 32 ( fall ), pp. 33 – 52. return to text 15 see network of central banks and supervisors for greening the financial system ( 2020 ), ngfs climate scenarios for central banks and supervisors ( pdf ) ( paris : ngfs, june ). return to text 16 see, for instance, simon dietz, james rising, thomas stoerk, and gernot wagner ( 2021 ), “ economic impacts of tipping points in the climate system, " pnas, vol. 118 ( august ). return to text 17 see, for instance, ecb ( 2021 ), “ firms and banks to benefit from early adoption of green policies, ecb ’ s economy - wide climate stress test shows, ” press release, september 22. return to text 18 see, for instance, network of central banks and supervisors for greening the financial system ( 2021 ), progress report on bridging data gaps ( pdf ) ( paris : ngfs, may ) ; and the communique ( pdf ) on the third g - 20 finance ministers and central bank governors meeting, held july 9 – 10, 2021. return to text 19 see gary gensler ( 2021 ), “ prepared remarks before the principles for responsible investment ‘ climate and global financial markets ’ webinar, ” washington, july 28. return to text 6