College Honors Program

Trickle-Down Central Banking: An Analysis of Quantitative Easing within the US Economy

Date of Creation

5-1-2022

Document Type

Campus Access Only

First Advisor

Miles Cahill

Abstract

This paper will discuss the implications of quantitative easing on the US economy since its implementation by the Federal Reserve in 2008. We will start by using Japan as a case study for an early form of quantitative easing in a major economy. We will then do an in depth analysis of the historical documents relating to QE ranging from the transcripts and other materials from the 2008-2010 FOMC meetings to press conferences and news articles written during the various stages of the policy. From these documents, we see that there were many concerns among the FOMC members as well as other prominent economists about the consequences of QE including fundamentally changing the way in which monetary policy is conducted in the United States as well as contributing to the growth of economic inequality. In the third chapter of this paper, we will expand on the Federal Reserve's role in the trend of increased economic inequality. This part of our analysis will focus on the relationship between quantitative easing, increasing asset prices (specifically stocks), and economic inequality. We find that the increase in stock prices brought on by QE has had a significant impact in rising economic inequality over that last decade.

Comments

Reader: Olena Staveley O'Carroll

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