The consequences of quantitative easing

In this fascinating article in The Independent Satiyajit Das considers whether quantitative easing (QE) has succeed in its objectives and whether the unintended consequences are so serious that it should not be used.

http://www.independent.co.uk/news/business/comment/satyajit-das-low-rates-have-caused-the-crisis–they-are-not-the-solution-to-it-10259752.html

His analysis of the ways in which QE actually affects the economy, in contrast to the ways in which economic theory suggests it should affect the economy, are essential reading.  In particular we should all be aware of his reference to the possible variation in the velocity of circulation of money, made famous by the quantity theory of inflation and the equation MV=PT.  All in all, anyone who is revising QE, as all Economics A level students should, would do well to read the article.

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