Analysis of pros and cons of quantitive easing

Abstract

From the financial crisis in 2008 to the impact of the COVID-19 in recent years, quantitative easing, an unconventional economic policy, has become a means for many large economies to alleviate economic recession and stimulate economic growth. QE can not only help overcome the downward pressure of the economy, but also maximize the avoidance of unemployment, inflation and other issues caused by more severe economic crises. This paper focuses on the practical process and effects of the four QEs in the United States, analyzes the pros and cons of QE, and pays attention to the consequences of the current interest rate hike in the United States. It is concluded that QE has a significant effect on stimulating economic growth and boosting the stock market in the short term, but may lead to a long-term slowdown in economic growth and inflation. This analysis enriches the explanation of the QE operation process and is conducive to the more appropriate application of this policy.