IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Quantitative easing in the United States after the crisis: conflicting views

Listed author(s):
  • Domenica Tropeano

    (University of Macerata)

The paper deals with the conflicting interpretations of the monetary policy carried out by the Federal Reserve during and after the financial crisis of 2007-08. That policy has been labelled as quantitative easing. The first interpretation of that policy is that the central bank will continue to flood the market with money to cause inflation or at least inflationary expectations. A depreciation would eventually do the same job too. Another interpretation, partially based on Minsky's theory of investment, is that easy monetary policy carried out beyond the lender-of-last-resort intervention might have the aim of sustaining the price of investment and validating firms' plans. In other words, it would be complementary to fiscal policy with the aim of sustaining profits and investment. The problem is that the Kaleckian model Minsky was using hardly corresponds to the present situation of the U.S. economy. The interpretation here proposed is that the aim of monetary policy is the recovery of financial asset prices to sustain banks profits and to restore the value of household wealth. This design might be considered as successful if we look at the recent data. But those signals are not encouraging if we look at long term sustainability of policies. The recovery of stock prices has encouraged speculation on anything possible by the big banks. Moreover the recovery of financial asset prices in contrast to the slow motion of housing prices might increase the already high inequality in wealth distribution.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by Macerata University, Department of Finance and Economic Sciences in its series Working Papers with number 64-2011.

in new window

Date of creation: Feb 2011
Date of revision: Feb 2011
Handle: RePEc:mcr:wpdief:wpaper00064
Contact details of provider: Postal:
Via Crescimbeni, 20 -62100 Macerata

Phone: 0733.258.201
Fax: 0733.258.205
Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

in new window

  1. Christian E. Weller & Amy Helburn, 2009. "Public Policy Options to Build Wealth for America’s Middle Class," Working Papers wp210, Political Economy Research Institute, University of Massachusetts at Amherst.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:mcr:wpdief:wpaper00064. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Silvana Tartufoli)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.