Quantitative Easing (QE) is an unconventional monetary policy used by central banks to stimulate the economy when conventional monetary policy has stopped working. QE involves the central bank creating new money and using it to purchase assets, such as government bonds. The aim of QE is to boost spending in the economy and return inflation to its target level.The Bank of Japan was one of the first central banks to use quantitative easing after the global financial crisis in 2008. The BoJ increased its asset purchases several times between 2010 and 2012, before announcing an open-ended program of asset purchases in 2013. This program was expanded further in 2016 in an attempt to reach the BoJ’s inflation target of 2%.The US Federal Reserve also undertook a number of rounds of quantitative easing during and after the financial crisis. The Fed’s first round of asset purchases, known as “QE1”, began in November 2008 and lasted until March 2010. This was followed by “QE2” from November 2010 to June 2011, and “Operation Twist” from September 2011 to December 2012. A third round of asset purchases, known as “QE3”, began in September 2012 and ended in October 2014.Quantitative easing has been used by various central banks across the world with varying degrees success . In general , it can be said that QE does help stimulate economies when conventional methods have failed but there are often negative side effects that come along with it , such as increasing levels or public debt.
