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The immediate challenge to the National Endowments for the Arts and the Humanities is not financial but philosophical. Government responsibility for culture must include an explicit statement of policy based upon a careful consideration of essential questions concerning the nature of and relationship between the state and culture. In the past the Endowments have been reluctant to enunciate a cultural policy lest it be objected that talk of a cultural policy sounds like a call for an autocratic ministry of culture. But grants cannot be made in a vacuum, and some cultural policy, however incoherent, inevitably informs decisions about grants. The issue is whether such a policy is to be made explicit, so that it may be studied and criticized, or whether such a policy is tacit, in which case it is likely to be enforced with little public scrutiny or evaluation. The federal government—responsible to both the individual and the nation, to the present and the future—has a unique role to play in American culture. What the role is can be defined only through the political process, in open debate.

This paper examines how shocks to the net supply of government bonds affect the euro area term structure of interest rates and the wider macroeconomy. To measure net debt supply we construct a new free-float measure, which adjusts total government debt of the four largest euro area economies for foreign official holdings and the maturity of the outstanding stock of debt. Using a small macro-finance BVAR model, we estimate that the ECB's government bond purchases, as announced on 22 January 2015, reduced euro area 10-year bond yields, on average, by around 30bps in 2015 through the so-called duration channel. The impact on the output gap and inflation in 2016 is of the order of 0.2ppt and 0.3ppt respectively. Our estimates are likely to underestimate the overall impact of the ECB's purchases on interest rates and inflation, as they exclude effects on credit risk and monetary policy expectations that may have compressed interest rates even further.