10 Years After: Does QE Work? Are Money-Financed Fiscal Programs Inevitable?

Does quantitative easing (QE) work? It is tempting to draw analogies along the lines of, “If a nation has to ask if it is winning a foreign war 10 years after initiating hostilities….” Stephen Williamson, economist formerly of the St. Louis Fed, argues that quantitative easing is a dud. Regional Federal Reserve banks on three occasions (at least) have issued studies that QE is not inflationary, and but only faintly stimulative. Certainly, present-day Japan is not a comforting example. In recent years, the Bank of Japan has bought back 45% of outstanding Japanese government bonds (that is saying something, btw),…

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