Quantitative Easing

Quantitative easing is a term which in short means massive increase of the money supply by open market operations by the central bank. It is done in extreme situations when interest rates are already near zero. Japan attempted it in the early 2000s with debatable results.

Quantitative easing may lead to higher inflation in the long run and its positive effects are still debatable. Central banks worldwide have attempted to adopt a policy similar to quantitative easing since the 2008 financial crisis.

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