Some commentators seem to think that ‘QE’ is simply a variant of, or a step along the road to, something called ‘Modern Monetary Theory’ or ‘MMT’.  It isn’t: and so in the second part of this series Saul explains what MMT is (and isn’t).

‘Quantitative easing’ or ‘QE’ refers to the purchase by central banks (such as Australia’s Reserve Bank) of financial assets (usually, but not always, government bonds) as a supplement (or an alternative) to more ‘orthodox’ monetary policy instruments such as cutting interest rates. ‘QE’ is often characterized in the media as ‘printing money’. Originating in Japan some 20 years ago, and then being picked up by other major central banks such as the US Federal Reserve, and the European Central Bank during the global financial crisis of 2098-09, a growing number of central banks (including Australia’s and New Zealand’s) have launched their own ‘QE’ programs in response to the economic downturns induced by Covid-19 – in part because official interest rates have fallen so low that they can’t, in practice, be cut any more.

In this webinar Saul will explain exactly what ‘QE’ is, how its done, why central banks are doing it, what its intended and unintended effects are, and how long central banks might keep doing it for.