better tomorrow

better tomorrow

Pittura, Politico/Sociale, Olio, 60x60x3cm
Quantitative easing is distinguished from standard central banking monetary policies, which usually targets the interbank interest rate. When interest rates have been lowered to nearly zero (because of either deflation or extremely low money demand), when a large number of non-performing or defaulted loans prevent further lending (money supply growth) by member banks, and when the main systemic risk is a recession or depression because banks cannot lend any more money, then central banks need to implement a new set of tactics. These are known as quantitative easing.

The central bank may enact quantitative easing by purchasing a predetermined number of bonds or other assets from financial institutions without reference to the interest rate. The goal of this policy is to increase the money supply rather than to decrease the interest rate, which cannot be decreased further.This is often considered a last resort to stimulate the economy.

Quantitative easing, and monetary policy in general, can only be carried out if the central bank controls the currency used. The central banks of US, for example, cannot unilaterally expand their money supply and thus cannot employ quantitative easing. They must instead rely on the Central Bank of US to set monetary policy.

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Commenti 6

Paulina Szczepaniak
6 anni fa
Great!
Fernanda Della Porta
6 anni fa
Bravo!
benny
6 anni fa
benny Artista
bella
Nanouk Reicht
6 anni fa
Un beau travail! La pensée est profonde...
ENZO CREMONE
6 anni fa
ENZO CREMONE Artista
Grandissimo dipinto.
Bravo e complimenti!
Vittorio Pasotti
6 anni fa
Very good!!!!......

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