Quantitative Easing: Long-Term Impacts

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asked Jul 29 in H&E by elinawilson0211 (120 points)
How would you assess the impact of quantitative easing on long-term interest rates and overall economic growth, considering both theoretical perspectives and empirical evidence?

1 Answer

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answered Jul 29 by CarpAlexander (250 points)

Quantitative easing typically lowers long-term interest rates by increasing bond prices and liquidity. While it can stimulate economic growth in the short term, its long-term effects are mixed. Empirical evidence shows varying impacts on inflation and investment, with risks including asset bubbles and reduced effectiveness over time.

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