Quantitative Easing: Reflections on Practice and Theory

Abstract

After exhausting all the conventional monetary policies, the major Western economies, in an attempt to deal with the long-term economic recession and stimulate an economic revival, have had to implement nonconventional quantitative easing. Although the quantitative easing policy has not been fully justified in theory, and its actual effects are not yet certain, the implementation of such a policy is a relatively solid refutation of the major economic theories of the Western world. Therefore, we must look for new theoretical bases for quantitative easing. Ultimately, the way to avoid the negative influence on the world economy of America's monetary easing policy is to create a world currency.