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quantitative easing

msa
by

Milan Marcus

on 18 March 2013

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Transcript of quantitative easing

Road Map 1. Key Question
2. What is Quantitative Easing?
3. Origins
4. 2008 Financial Crisis
5. Case Study: Quantitative Easing in the U.K.
6. Quantitative Easing in the U.S.
7. Final Thesis
8. Sources and Bibliography A country's central bank produces money... ...to inject into the economy Key Question Is quantitative easing an
effective monetary policy
against economic stagnation in
the U.K.? What is Quantitative Easing? Quantitative easing (QE) is an unconventional monetary policy used when conventional policies don't give the economy the expected boost. Quantitative Easing Origins Sources http://www.bankofengland.co.uk/markets/Documents/money/publications/redbookqe.pdf
http://www.bankofengland.co.uk/monetarypolicy/Pages/qe/default.aspx
http://www.federalreserve.gov/Pubs/FEDS/2004/200457/200457pap.pdf
http://www.federalreserve.gov/monetarypolicy/bst_crisisresponse.htm
http://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm
http://www.federalreserve.gov/monetarypolicy/bst_openmarketops.htm
http://en.wikipedia.org/wiki/Quantitative_easing#Amounts
http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/qb110301.pdf
www.parliament.uk/briefing-papers/sn04997.pdf
http://www.marketoracle.co.uk/images/2010/Jan/japan-gdp-chart.gif
http://www.bloomberg.com/quote/UKX:IND/chart
http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/qb110301.pdf
http://www.marketoracle.co.uk/images/2010/Jan/japan-gdp-chart.gif
http://www.bloomberg.com/quote/UKX:IND/chart
http://www.economicshelp.org/blog/wp-content/uploads/2012/10/unemployment-past-5-years-percent-500x407.png Newly created money Assets http://www.leftfootforward.org/images/2009/11/Unemployment-rate-11-11-09.jpg
http://img.thisismoney.co.uk/i/pix/2010/05/gdp_399x318.jpg
http://www.economicshelp.org/blog/wp-content/uploads/2012/10/economic-growth-uk-ons-quarter-1024x668.png
http://i.telegraph.co.uk/multimedia/archive/01424/uk_cpi_inflation_1424217c.jpg
http://www.investopedia.com/terms/d/deflation.asp#axzz2NJp45BKl
http://newsimg.bbc.co.uk/media/images/44235000/gif/_44235452_h_price_416.gif
http://www.forbes.com/sites/afontevecchia/2012/12/12/qe4-is-here-bernanke-delivers-85b-a-month-until-unemployment-falls-below-6-5/
http://useconomy.about.com/od/Fed/g/QE1.htm
http://www.guardian.co.uk/business/2013/mar/07/seven-strange-ideas-bank-england-growth
http://media.economist.com/sites/default/files/cf_images/20060930/CFN357.gif Central Bank
MPC= Monetary Policy Committee
APF= Asset Purchase Facility 2009: QE implemented as response to the 2008 crash Asset owners Investment Spending Loans Riskier Assets Corporations and Citizens Consumer Goods and Services Overall Economic Health Deflation: The decline of prices of assets, services and consumer goods. 2008 Financial Crisis 4 stages of QE: Amounts QE 1: 2008
QE 2: 2010
QE 3: 2012
QE 4: end of 2012 QE 1: 1.25 trln$
QE 2: 600 bln$
QE 3: 40 bln$/month
QE 4: 85 bln$/month sets monetary policy
creates money
oversees commercial banking system Amounts total: 375 bln £ (560.5 bln $) Weak Currency= greater exports, trade surplus
Strong Currency= greater imports, trade deficits as a nation will buy more than it sells Monetary Velocity= how much money passes through how many different owners within a certain period of time. Final Thesis Quantitative easing has so far produced mixed results in the U.K. While investors seem to have profited, it does not seem to have improved employment or GDP growth up until now. http://www.sharesexplained.com/wp-content/uploads/2012/08/ftse2008crash.jpg
http://www.economicshelp.org/blog/wp-content/uploads/2012/09/bank-england-holding-gilts-500x346.png
http://www.bankofengland.co.uk/monetarypolicy/Pages/qe/facility.aspx
http://en.wikipedia.org/wiki/Ceteris_paribus Bibliography Heather, Mary; Unabridged Guide:
Quantitative easing
Full transcript