Quantitative Easing
Quantitative easing (QE) is an unconventional monetary policy used by central banks to stimulate the economy when traditional monetary policy has become ineffective. It involves the central bank buying government bonds or other financial assets from the market in order to inject money into the economy. This increases the money supply and lowers interest rates, which can help stimulate economic activity.
History of Quantitative Easing
Quantitative easing was first used by the Bank of Japan in the early 2000s in response to the country’s economic stagnation. Since then, it has been used by other central banks around the world, including the Federal Reserve in the United States, the Bank of England, and the European Central Bank. It has become a popular tool for central banks to stimulate economic activity in times of economic crisis.
Comparison of Quantitative Easing Programs
| Country | Amount (in billions) |
|---|---|
| United States | $4.5 |
| United Kingdom | $375 |
| Japan | $1.4 |
| European Union | $1.2 |
Summary
Quantitative easing is an unconventional monetary policy used by central banks to stimulate the economy when traditional monetary policy has become ineffective. It involves the central bank buying government bonds or other financial assets from the market in order to inject money into the economy. This increases the money supply and lowers interest rates, which can help stimulate economic activity. For more information on quantitative easing, visit the websites of the Federal Reserve, the Bank of England, and the European Central Bank.
See Also
- Monetary Policy
- Interest Rates
- Money Supply
- Fiscal Policy
- Central Bank
- Government Bonds
- Inflation
- Deflation
- Economic Stimulus
- Economic Crisis
