THE IMPACT OF QUANTITATIVE EASING ON LONG-TERM INFLATION EXPECTATIONS

Аннотация

Quantitative easing (QE) has been a pivotal monetary policy tool employed by central banks in response to economic crises, particularly following the 2008 financial crisis. This paper examines the impact of QE on long-term inflation expectations, focusing on the transmission mechanisms through which large-scale asset purchases influence inflation dynamics. Utilizing a combination of econometric analysis and case studies from major economies, the study investigates whether QE has succeeded in anchoring inflation expectations or if it has inadvertently led to heightened uncertainty about future inflation. The findings suggest that while QE initially stabilized inflation expectations during periods of economic distress, its prolonged use has raised concerns about potential inflationary pressures in the long term. The paper concludes with policy recommendations for central banks to mitigate unintended consequences while maintaining price stability.