Financial Troubles and Quantitative Easing

1687 Words Jan 29th, 2018 7 Pages
When looking at larger scale financial problems, such as those experienced during recent recessionary trends, it is not just individuals and organizations that do unexpected things, but governments as well. One such action that was taken both by the United States government and others abroad during the financial crisis of the new millennium was that of quantitative easing. As a theory, quantitative easing has had both heavy praise and scorn from different scholarly backers and while there are questions as to its overall effectiveness, the recent use shows that there is some truth to its principles. By analyzing the theory of quantitative easing as well as its positive and negative effects, both theoretical and realized in the real-world, it is possible to understand why governments recently used this technique. The first aspect of quantitative easing to analyze is its basic definition and the way that governments look at the topic. In market theory, there are a few ways to spur on the economy in terms of increasing money flow, limiting deflation of currency, and to give new life to otherwise failing economic conditions. More often than not, governments will infuse the economy through a standard monetary policy that includes buying government bonds for short-term returns to stimulate the economy with…

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