In this paper we analyze the effects of unconventional monetary
policy within a stochastic dynamic general equilibrium
model. We consider a variety of assets that in particular
differ with regard to their eligibility in open market operations.
This leads to different equilibrium interest rates,
where spreads originates in the liquidity of assets. While
only short-term government bonds are eligible in normal
times, money supply can be eased via changes in the collateral
requirements when the policy rate is at the zero lower
bound. We examine the long-run and short-run effects of an
unconventional monetary policy, i.e. of acception also firm
loans in open market operations. This policy is shown to
stimulate the economy via an increase the total amount of
eligible securities (quantitative easing) and via a decrease
in the loan rate (qualitative easing). We further apply the
model to examine liquidity demand shocks and to quantify
the effects of the Federal Reserve response in 2008.