IS QUANTITATIVE EASING AN APPROPRIATE WAY FOR THE SUCCESS OF MONETARY POLICY IN A POST-CRISIS PERIOD?

Petre Prisecaru

Global Economic Observer, 2015, vol. 3, issue 2, 27-35

Abstract: Quantitative easing is an unorthodox monetary policy focused on buying large quantities of bonds, mainly government bonds, by central bank in order to increase the reserves of commercial banks and thus to support private bank lending. It first started in Japan 14 year ago and this country experienced 3 rounds of QE with limited success. ,After that it spread in USA and UK with a certain degree of success and finally it was adopted by ECB in March 2015. Although huge amounts of money were injected in the banks it is difficult to assess to what extent liquidity trap was overcome and economic recovery after the recent crisis was helped. The opinions of different financial analysts and technocrats are divided and their arguments are not based on serious analyses using reliable statistical data and clear scientific evidence.

Keywords: monetary policy; financial crisis; interest rate; bond; financial asset; money supply; credit. (search for similar items in EconPapers)
JEL-codes: E31 E41 E43 G12 G21 O23 (search for similar items in EconPapers)
Date: 2015-11
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