Understanding Quantitative Easing

The video discusses the 2007-2008 financial crisis and the central banks' response using monetary policy. It highlights the challenges of negative interest rates and introduces quantitative easing (QE) as an alternative. QE involves creating new money to purchase assets, stimulating economic activity by increasing asset prices and reducing interest rates. The video also notes the Bank of England's significant purchase of UK government bonds, internalizing a portion of the UK's debt.

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