Quantitative easing

To gain a better understanding of quantitative easing (QE) follow this link to watch a film from The Daily Telegraph website:

http://www.telegraph.co.uk/finance/economics/11361414/Economics-explainer-what-is-QE.html

The debate on whether QE has had a positive effect on the real economy or whether it has simply inflated prices in asset markets might well prove inconclusive but you need to be able to evaluate the policy, so follow these links for some arguments in favour and against QE:

In favour

http://www.theguardian.com/business/2014/apr/17/uk-better-off-quantitative-easing

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/10526947/Farewell-QE-you-have-been-a-magnificent-success.html

Against

http://www.mindfulmoney.co.uk/wp/shaun-richards/what-did-quantitative-easing-do-for-the-uk-in-the-economic-war-daddy/

http://www.economicsuk.com/blog/001733.html

In summary

http://www.economist.com/node/21558596

Overall it might take time to understand the full consequences of QE, particularly on inflation.  However, some have argued that thanks to the liquidity trap created by very low interest rates the Bank of England had no alternative.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s