Before the Great Financial Crisis of 2008–09, significant reductions in official interest rates typically proved sufficient to generate sustainable economic recoveries from downturns. However, with economies and financial markets in freefall during the crisis despite a cut in interest rates to effectively zero, policymakers in some advanced economies launched a major new tool called quantitative easing (QE). This involved central banks purchasing huge amounts of financial assets.
This book offers a thorough and perspicacious analysis of QE, which has become a recovery method of last resort. Whilst it was successful in averting another Great Depression and stimulating growth, it remains controversial and continues to promote widespread debate in economics, financial, and political-economy circles. This book is essential reading for anyone wishing to understand central banking in the national economy.
Foreword by C. A. E. Goodhart 1. Monetary policymaking since the end of Bretton Woods 2. Key monetary policy trends and events before the Great Financial Crisis 3. The Great Financial Crisis and quantitative easing 4. How quantitative easing works 5. Measuring the effectiveness and impact of quantitative easing 6. International spillovers of quantitative easing 7. Criticisms and negative externalities of quantitative easing 8. Exiting quantitative easing and policies for the next slowdown
Jonathan Ashworth is an independent economist. He has worked as an economist at Morgan Stanley and Barclays Wealth and his work has been widely cited in the media including The Economist, The Financial Times and The Wall Street Journal. He has also worked as an economist in the productivity and structural reform team at HM Treasury, where he did work on the famous "Five Tests" for whether Britain should join the euro.