Quantitative Easing Explained

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The BBC’s Stephanie Flanders explains how quantitative easing works

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3 thoughts on “Quantitative Easing Explained

  1. We seem to be stuck in a classic Keynesian liquidity trap – low interest rates, increased saving, the whole economy flatlining. I prefer Keynes slightly tongue-in-cheek idea of throwing money from a helicopter rather than QE. His point was that putting money directly into the economy, perhaps in the form of a £1000 in vouchers with a short-term expiry date for every person in the country is more likely to stimulate growth. And it would be cheaper.

  2. This is the old version of Stephanie Flanders explanation.

    The New Version (http://www.bbc.co.uk/news/business-15492115) has a phrase removed – “like only a central bank can” as Stehpanie Flanders made the classic mistake of thinking that only Central Banks create money when in actual fact, 97% of money (deposit money in Bank Accounts) is created by Private Banks when they lend.

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