Reading some international experiences in quantitative easing : The most important results and lessons

Abstract

The arrival of short-term interest rates to levels close to zero in some countries, such as Japan, United States and the European Union did not spare them from the financial crisis, whose effects worsen starting from 2008, which prompted central banks to use quantitative easing to achieve their desired goals. For this reason, this study aims to highlight the quantitative easing as one of the modern unconventional monetary policy tools adopted by some central banks in the crisis period after reaching the traditional monetary policy tools their limitations. The Quantitative easing involves the Central Banks injecting new financial amounts directly into the economy by purchasing long-term financial assets in order to raise their prices and reduce long-term interest rates, including increasing the liquidity of their commercial banks, and thus addressing the liquidity crisis that led to the bankruptcy of the largest commercial banks of the United States in 2008. This tool enabled developed countries to avoid economic stagnation while the economic situation in Venezuela that got so worse, which confirms that studies and research pursued of the effects of quantitative easing effects on the macro economic variables were not collected on constant results and confirms its effect on inflation, interest rate, asset prices and long-term the exchange rate