Questions tagged [quantitative-easing]
The quantitative-easing tag has no usage guidance.
72
questions
0
votes
2
answers
48
views
Instead of quantitative easing why wouldn’t Stimulus at Checkout (SAC) work?
Instead of quantitative easing and interest rate reductions why wouldn’t Stimulus at Checkout (SAC) work?
What is SAC? When the Fed needs to stimulate the economy, using Point of Sale technology, SAC ...
- 1
0
votes
0
answers
25
views
What happens to Government Bonds after the Central Bank buys them? [duplicate]
When a central bank buys its own government bonds if the government owns the central bank the government essentially owes money to itself. In this situation what is done with the Bonds?
Are they re ...
- 113
0
votes
0
answers
28
views
Why does Quantitative Easing buy Primary Government Bonds instead of other things such as funding the Goverment budget more directly? [duplicate]
From my understanding Quantitative Easing(qe) is used to increase the money supply and stimulate growth. Why are bonds primarily the asset qe buys? Would it not achieve the same thing by just ...
- 113
1
vote
1
answer
49
views
How can the Bank of England hold government debt through quantitative easing?
In this article the Economist writes about the BoE:
"in the past decade the bank’s successive rounds of quantitative easing (qe), whereby it creates new money to buy bonds, have left it holding ...
- 113
0
votes
0
answers
55
views
Where did the money supply go?
The money supply went from about \$4 trillion in 2020 to about $20 trillion today. Where did all that money go?
When the money supply went from about \$1.4 trillion to about $1.7 trillion, I was ...
1
vote
1
answer
65
views
Are all instances of European quantitative easing in the last 50 years, publicaly documented?
Are all instances of legal, ex nihilo, quantitative easing (QE) within Europe, publically documented for the past 50 years, or is that process/data obfuscated?
If yes, is there a ...
- 83
0
votes
2
answers
151
views
Why is quantitative easing compared to "money printing"?
Context
Some questions on this site ask about the difference between "money printing" and "quantitative easing". I am experiencing some difficulties to understand what some of the ...
- 83
0
votes
1
answer
125
views
How do central banks get the money for quantitative easing?
From the Wikipedia page on QE:
Quantitative easing (QE) is a monetary policy whereby a central bank purchases predetermined amounts of government bonds or other financial assets (e.g., municipal ...
- 47
1
vote
1
answer
40
views
Any support for the idea that QE is employed to prevent the money supply from contracting
It appears to me that QE has been employed after the collapse of housing bubbles - both in Japan in the early nineties and in many other countries around 2008. During a housing bubble there is a high ...
- 1,057
1
vote
1
answer
39
views
To what extent can cryptocurrencies be influenced by monetary policy?
Background
In modern economies, at least up until ~10 years ago, it was assumed that a currency would be technically able to be subjected to monetary policy, that is, where more money is created or ...
- 721
0
votes
1
answer
106
views
During QE what prevents the banks from selling government debt to invest in the stock market instead of lending out the money?
This is how QE is supposed to work:
The fed buys government debt from banks.
This lowers the long term interest rates and businesses and consumers borrow more, which is good for the economy.
But what ...
- 219
1
vote
1
answer
52
views
Risks asscoiated short term stimulus as interest rates approach zero
TL;DR
Government interest rates are approaching zero.
What are the risks to borrowing large sums in the current enviroment? Would inflation occur?
Full Story
I was recently reading an article about ...
- 175
1
vote
1
answer
77
views
Did the Bank Of England say QE doesn't work?
https://www.bankofengland.co.uk/working-paper/2020/does-quantitative-easing-boost-bank-lending-to-the-real-economy
Staff Working Paper No. 883 Published on 14 August 2020
From the conclusion:
If the ...
- 131
0
votes
2
answers
75
views
Typical duration of bonds purchased in QE
I know that QE involves the purchasing of government bonds by the central bank "printing money" but I am curious about what the typical time to maturity of those bonds are. I.e. the typical ...
- 1,057
1
vote
1
answer
44
views
How does QE effect the collaterals?
For instance, the ECB accepts green bonds as collateral. And also they are more likely to include green bonds in a QE program.
Does this face make a green bond more valuable? How would it work in a ...
- 608
3
votes
4
answers
296
views
What happens when government bonds purchased as part of central bank quantitative easing (QE) reach maturity?
Does the central bank ask the government to pay or are they rolled over?
- 821
0
votes
2
answers
74
views
Does quantitative easing favour banks?
The reserve bank recently announced it would print $100B over 6 months, and spend this buying back gov bonds.
Will this policy advantage the financial sector over other parts of the economy?
Why ...
- 119
0
votes
1
answer
43
views
Interest rates in Quantitative Easing of 2008
When the US govt printed money in 2008 and lend it to the banks, how much the banks had to pay in interest?
- 972
1
vote
1
answer
185
views
Why may printing trillions of dollars not lead to inflation?
By definition, inflation should be affected by the increase of the money supply. During the pandemic, there have been numerous huge monetary policies executed, e.g., quantitative easing (QE), ...
- 608
3
votes
2
answers
152
views
Are quantitative easing and helicopter cash really different tactics? And how does QE relate to Modern Monetary Theory?
I've been trying to get a clear understanding of exactly what economists mean by Quantitative Easing (QE). It seems to me that different people mean different things by it. I find simplistic analogies ...
- 139
5
votes
1
answer
243
views
Is QE the equivalent of printing money?
I heard somewhere that QE is not the same as printing money -- in fact as I know it, QE is the purchase of assets in exchange for more liquid and high-quality, better collaborated debt. In other words,...
- 51
0
votes
0
answers
44
views
Pareto efficiency analysis of level of M1 growth from quantitative easing
BMO recently conducted an analysis on US monetary policy and noted that quantitative easing has had diminishing effects on M1 growth. Daniel Krieter wrote:
QE has fed through to the real economy in a ...
- 1,103
0
votes
1
answer
90
views
Quantitative easing and interest rate parity
Suppose a country initiates quantitative easing by printing money and buying government debt. This will put a downward pressure on interest rates. Will this action tend to depreciate the country's ...
- 101
2
votes
1
answer
47
views
Does the government ever pay back its debt from the OMO to the Fed? [closed]
I'm getting confused about how exactly does money being created by the Fed.
From investopidia.com:
...
- 123
0
votes
1
answer
69
views
Does quantitative easing appreciate or depreciate the domestic currency?
410 gone says the domestic currency depreciates.
You've identified the first-order effect: the supply of local currency has increased, so its price (and from the perspective of other currencies, ...
user4020
0
votes
2
answers
137
views
Why does the Fed feel the need to reduce its balance sheet? [closed]
Why does the Fed feel the need to reduce its balance sheet?
What is the problem with the Fed having a large balance sheet long term? What would happen if the value on the Fed's balance sheet ...
- 659
0
votes
1
answer
265
views
How exactly does QE affect the value of the USD?
A lot of people on the Internet refer to quantitative easing (QE) as a form of "legal money printing" when it is actually not. As such, many of these folks would thus erroneously say that QE leads to ...
- 399
1
vote
1
answer
49
views
Why doesn't QE cause the federal funds rate to continue decreasing?
Quantitative easing (QE) is essentially a large-scale form of open market operations, in which the Fed buys large amounts of treasury bills of all maturities (ranging from 1-month to 30-year) and ...
- 399
-2
votes
1
answer
39
views
During the COVID pandemic, why can't helicopter money be used to replace lost income for those barred from working?
In "normal times" my understanding is that one way Central banks create money is by extending a loan. The loan ensures money will be soaked back up in future, thus preventing inflation / devaluation ...
- 97
0
votes
1
answer
110
views
How yield rates influence the "cost of borrowing" for borrowers
I am currently learning about quantitative easing, and I am having trouble understanding yield rates and how that influences the "cost of borrowing".
This is the resource I am using.
The lecturer ...
- 191
2
votes
2
answers
85
views
Why is the Australian Government financing the stimulus via debt rather than the RBA?
The Australian Government is engaging in quantitative easing for the first time. The RBA is creating money that is being used to buy bonds on the secondary market so that there is enough liquidity for ...
- 161
0
votes
1
answer
396
views
How much money has the Fed printed?
The Federal Reserve is the bank of banks in the US. While it cannot force banks to change their rates in order to monitor the economy, it has several other ways to influence. One way it by printing ...
- 101
0
votes
1
answer
62
views
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 ...
- 103
0
votes
1
answer
121
views
Why does lowering stock rate of returns increase stock prices?
(i) I don't understand point 1 beneath. Why does the Federal Reserve's buying assets lower risk premiums?
(ii) I don't understand point 3 beneath. Why does lower stock rate of returns increase stock ...
user4020
1
vote
1
answer
197
views
How does the Federal Reserve unwind the asset purchasing scheme announced in response to the 2020 Coronavirus Pandemic?
On Monday, 06 April, 2020 the Financial Times reported that the Federal Reserve balance sheet could increase to $9 trillion. This is partly due to the myriad of initiatives, some new, to protect the ...
- 81
-1
votes
2
answers
321
views
What amount of Quantitative Easing will cause hyperinflation?
You all know that Quantitative Easing shifts the LM and AD curves right, so I haven't taken the time to redraw this picture.
What's the maximum amount of Quantitative Easing that the Federal Reserve ...
user4020
-2
votes
1
answer
298
views
Can the Federal Reserve's Quantitative Easing negative interest rates?
When I did my B.A. in economics, I never thought about extending $L(i)$ to negative y-axis.
A central bank like the US Federal Reserve is quantitative easing more. This means $\dfrac{M}{P}$ curve ...
user4020
1
vote
1
answer
135
views
Why isn't the Federal Reserve bothered by the drawbacks of its unlimited Quantitative Easing?
On Mar. 26 2020, Fed announces unlimited QE and sets up several new lending programs : finance. I know little on the U.S., as my B.A. economics degree is from a Ontario university. If I remember the ...
user4020
2
votes
2
answers
144
views
How is the Corona $2 trilion stimulus package going to be financed?
Perhaps this is a simple question but as a non-US citizen I don't understand how the US government is going to finance the $2 trillion stimulus package to combat the economic damage due to the Corona ...
- 121
5
votes
3
answers
122
views
Can quantative easing be summarized as "The state prints cash to pay its debt to private sector"?
I find that most sources describe quantitative easing in an overly complicated way that obscures what it basically means.
As far as I understand a central bank is a public entity owned by a state, ...
- 149
3
votes
1
answer
178
views
Are Open Market Operations a Gift to the .1%?
My Background
I was an Economics major a long time ago and I don't work in a related field. I have this question that's been nagging me. I hope somebody can answer the questions at the bottom.
...
user25878
2
votes
1
answer
52
views
The Fed Lowered Interest Rates, Are they going to buy Bonds?
I originally asked this question on personal finance/money because I didn't know that this exchange site existed. link to same question at person finance/money. Someone on that site mentioned that it ...
- 123
0
votes
0
answers
30
views
Do low bond yields make QE ineffective
The next recession is coming up soon and I've been wondering how effective our expansionary monetary policy will be. The interest rate doesn't have a ton of room to be lowered and bond yields are half ...
- 333
0
votes
0
answers
24
views
Why the historically narrow asset class purchases from QE
Let's begin by mapping out some context by assuming the following goals of implementing QE:
prevent dire systemic liquidity concerns
reach inflation targets
manage expectations in the private sector
...
- 1,103
3
votes
2
answers
147
views
What happened to the money multiplier after QE?
QE meant that the monetary base increased dramatically, yet we don't see such a large reaction in money supply (I am thinking of M4 for the UK) nor in inflation. Why is this money not being lent out? ...
- 68
1
vote
3
answers
485
views
Did (or can) quantitative easing cause an "everything bubble"?
Wolfstreet claims that
It’s true that despite QE globally – not just in Japan – there has been relatively little consumer price inflation in the countries whose central banks perpetrated it. But it ...
- 3,918
2
votes
1
answer
131
views
Why inflation is still reported low?
Recently I heard from Richard Koo's video, that central banks have injected so much money to the banking system. There is enough reserves in the U.S. banking system to increase money supply 16 times. ...
- 157
0
votes
1
answer
171
views
Quantitative easing
Quantitative easing is an unconventional monetary policy in which a central bank
purchases government securities or other securities from the market in order to lower interest rates and increase the ...
- 1
-1
votes
1
answer
69
views
Question on money supply related to new crypto project
Following questions are related to a crypto project I am working on and proper answers are of utmost importance to this concept's development. I unfortunately lack expert knowledge about money supply ...
1
vote
0
answers
74
views
How does changing the Bank of England base rate work?
If we assume the demand for money (D above) is fixed in this position (for the purposes of this question), and supply (S) is fixed in this position, then how can the BoE change market interest rates (...