Quantitative Easing Essay

2510 Words Sep 5th, 2010 11 Pages
A critical review of quantitative easing and its impact on the UK economy

Research proposal -

“A critical review of Quantitative easing and its impact on the UK’s economy”

Research background (Theory, concepts, Key issues, problems and researchable questions) -

Theory- During the recession flow of the money in the market is very less, hence central bank lend the money to the borrowers at low interest rates, but there is limitation they cannot go beyond zero percentage, hence central bank do “Quantitative Easing” that is printing of money and boost the money into market by purchasing the assets and buying the gilts or government debts.

Concepts- the main concept behind the Quantitative easing is to boost the money into the market
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It’s lesson from the history about avoiding too much printing of money. Authors have used qualitative exploratory research method.

Matthew Lynn economist explains “four ways to pull an economy out of the recession” in his article published in their websites arabianbusiness.com on 25th November, 2009. Author has research on the UK economy and found that GDP growth is negligible i.e. 0.4 pc drop noticed in Q3 results. He found that policy of the UK government is not working as already 200 billion pounds already boosted into the market. He suggested UK government has to change the policy in order to recover recession. UK economy is stuck in the borrowing and debts. House hold debts are highest amongst all other countries. It has highest debts last year 14.8 B pounds noticed in September. According to the research it has been seen that government is printing money and increasing banks reserve and landing money at lowest interest rates still there is no change in economy. Value of pound is also lowering compares to euro and deficit of the debts are also high. According to author he suggested four ways to improve economy “It must curb the budget deficit, support the pound, stop printing money, and cut taxes.” (Matthew Lynn, 2009). Author has used quantitative data and research method is conclusive descriptive.

Chris Giles article “To be continued QE or not to be continued QE” published in financial times on 4th November,
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