# Why has QE produced hyper-inflation in other countries, but not US and China? [duplicate]

QE and similar methods ("printing money", increasing M2 money supply) have caused currencies in countries such as Zimbabwe and Venezuela to collapse.

Why hasn't it caused similar issues in countries such as the US and China which have also increased their M2 by large amounts over the past decade?

That is because inflation is a change in price level and price level can be expressed using the basic monetary model as:

$$P=\frac{MV}{Y}$$

Where M is money supply, V is velocity of money and Y is output.

Hence, while it is true that the price level is increasing in money supply (M) it is also decreasing in (Y). Hence if your money supply grows for example by 5% but also your output grows by 5% and velocity stays the same your country will experience 0 inflation.

Countries that experience high levels of inflation such as Venezuela have a double problem of increasing money supply while their output is plummeting making their inflation very bad, while other nations get less inflation than you would normally see given change in M due to growth in output.

Furthermore, in certain types of recessions when there is a liquidity trap all increase in M can be offset by decrease in V. This is the reason why for example US or Euro-Area experienced low inflation even though they had large recessions and large expansion in money supply in the recent recession.

In more complex models expectations play role as well but I don’t want to go too much into technicalities as the main lessons carry from them to the above mentioned simple model.