Research on the influencing factors of quantitative easing policy

Abstract

To cushion the blow from the financial crisis, the Federal Reserve stimulated the economy for the first time in 2008 through quantitative easing. In 2020, the outbreak of the covid-19 has caught the US economy in turmoil again. United States implement QE policy again after six years. While the US economy continues to warm up, the negative impact of QE policy on it has gradually emerged. Therefore, this paper will study three related factors about the impact of quantitative easing through the “Theory + Case analysis” research methods on the unemployment rate, deflation rate, and currency circulation M0. It is found that the implementation and withdrawal of QE are closely related to the change of the unemployment rate, the degree of the deflation rate and the M0 of currency circulation. The significance of this paper is that looking at quantitative easing from multiple perspectives can better understand the essence of policy operation and help the community to prevent the negative effects of quantitative easing.