Quite easy !
In 2008 the world faced one of the largest financial crises in recent times. This crisis was so deep and so hindering on growth in economies that the central banks of many countries resorted to using unconventional techniques to try and kick-start their economies where the traditional had failed them. The most prominent unconventional technique that they used is known as quantitative easing. In this essay I will explore and discuss the theory of how quantitative easing works and if it can be more effective than the traditional policy measures. To do this I will evaluate the usefulness of both the conventional and unconventional as monetary policy tools and explain which one of them achieves the objectives of macroeconomic policy the best.
The term quantitative easing (QE) refers to a certain technique that Central banks employ which entails the purchasing, through the electronic creation of money, of financial assets, such…
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