Quantitative easing

Quantitative easing (QE) is a monetary policy whereby a central bank purchases predetermined amounts of government bonds or other financial assets (e.g., municipal bonds, corporate bonds, stocks, etc.) in order to inject money into the economy to expand economic activity.^[1]

QE is an unconventional form of monetary policy, which is usually used when inflation is very low or negative, and when standard monetary policy instruments have become ineffective.^[2]

Quantitative tightening (QT) does the opposite, where for monetary policy reasons, a central bank sells off some portion of its own held or previously purchased government bonds or other financial assets, to a mix of commercial banks and other financial institutions, usually after periods of their own, earlier, quantitative easing purchases.^[3]

References

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[1] "QUANTITATIVE EASING AND UNCONVENTIONAL MONETARY POLICY — AN INTRODUCTION"

[2] "Funding Quantitative Easing to Target Inflation"

[3] "Is this finally the economic collapse?"

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