The Effects of Quantitative Easing - Annotated Bibliography Example

Article evaluation Blinder, S. A. (2010) Quantitative Easing: Entrance and Exist Strategies. Federal Reserve Bank of St. Louis Review. 92 (6), pp. 465-79. This article is written to address the Quantitative Easing strategies for entry and exit. According to the article, during economic recession, central banks tend to initiate any strategy at their disposal in order to recuperate the situation. In efforts to fight the worst recession 2007-08, the Bank of England reduced funds rate up to nearly zero.

In addition, with view of recovering the state of economy the Bank of Japan squarely created money that reduced the price of assets. Having these conventional ammunitions, the central banks changed the composition of their balance sheets through quantitative easing a monetary policy designed to ease liquidity and/or credit conditions. Upon reversing the monetary policy, they constituted to quantitative tightening. In other words, they practiced quantitative easing exit strategies indicating that it is a monetary policy, which is aberrant.

Hudson, M. (2010) U.S. “quantitative easing” is fracturing the Global Economy. Real-world economies review. 55. pp. 1-12. This article is written to address the manner in which economic growth is being frustrated by quantitative easing. In the case of United States, the Federal Reserve Bank led by Ben Bernanke flooded the US banking system with liquidity. Consequently, treasury bills started yielding at less than 1% and banks could draw freely on Fed credit. By feeding the banks with liquidity, Fed ensured that banks took the opportunity to lend out credit at a markup.

This meant that commercial banks would earn their way out of debt crisis. Yue, H. (2011). The Effects of Quantitative Easing on Inflation Rate: A possible Explanation on the Phenomenon. European Journal of Economics, Finance and Administrative Sciences. 41 pp. 1-7. In writing his article, Yue, Ho-Yin addresses the issues affecting inflation rate and brings forth quantitative easing as a main cause. He argues that economy has not grown despite the release of Quantitative Easing. This is evidenced by the collapse of the United States’ housing market in 2007.

This was a notable lose to numerous financial institutions as a result of housing mortgage default. In his article, he examines through proper graphs and charts the effects quantitative easing has on inflation rate. In concludes by stating that credit crisis and quantitative easing has caused a decrease in the money private sectors get from banks. Therefore, Yue believe in the importance of considering how effective quantitative easing can be on real economy. Joyce, M.A.S. et. al. The Financial Market Impact of Quantitative Easing in the United Kingdom.

Available from: http://www.ijcb.org/journal/ijcb11q3a5.pdf [Accessed 29 March 2012] This article has investigated the quantitative easing policy initiated by the Bank of England on all the assets in the United Kingdom. From the article, when central bank issues reserves, assets are purchased. This depresses government bonds either medium or long term. The main aim in this article is to investigate the impact large purchases has on the financial market. From the research, QE purchases has contributed to the effect.

Douglas, J. (2011) Bank of England Quantitative Easing. THE WALL STREET JOURNAL. [ONLINE] [Accessed 29 March 2012] Douglas article gives concern to the role the bank of England has in boosting the economy. According to the article, the Bank of England aims at purchasing government bonds worthy $75 billion in a new venture of quantitative easing to promote the stagnant economy. It is evident that bank-funding markets are straining as a result of euro-area and sovereigns. Due to the threatened worldwide economy, the UK’s economy stands threatened as well.

Therefore, through the monetary policy Committee of the UK’s central bank, purchase of assets will be financed to control the rate of inflation which if not controlled might drop to 2.0%