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A Global Monetary PlagueHow Quantitative Easing by the Roosevelt Fed Ended in a Crash

A Global Monetary Plague: How Quantitative Easing by the Roosevelt Fed Ended in a Crash [No one had yet coined the term quantitative easing (QE). From 1934 to 1936, the Federal Reserve’s balance sheet expanded by a similar percentage of GDP as from 2009 to 2013. Moreover, the monetary base at that time, including bank reserves at the Fed, was all non-interest bearing, unlike in recent years (under the Great Monetary Experiment (GME)) when reserves have paid interest at an above market rate (25bp vs. say 0–10bp for short-dated Treasury bills). Also, adding to the power of high-powered money in this early episode of QE (compared to under the GME) was the pro-cyclical fluctuation of prices.] http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png

A Global Monetary PlagueHow Quantitative Easing by the Roosevelt Fed Ended in a Crash

Brown, Brendan
Springer Journals — Dec 3, 2015
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Publisher
Palgrave Macmillan UK
Copyright
© The Editor(s) (if applicable) and The Author(s) 2015
ISBN
978-1-349-55236-8
Pages
180 –196
DOI
10.1057/9781137478856_8
Publisher site
See Chapter on Publisher Site

Abstract

[No one had yet coined the term quantitative easing (QE). From 1934 to 1936, the Federal Reserve’s balance sheet expanded by a similar percentage of GDP as from 2009 to 2013. Moreover, the monetary base at that time, including bank reserves at the Fed, was all non-interest bearing, unlike in recent years (under the Great Monetary Experiment (GME)) when reserves have paid interest at an above market rate (25bp vs. say 0–10bp for short-dated Treasury bills). Also, adding to the power of high-powered money in this early episode of QE (compared to under the GME) was the pro-cyclical fluctuation of prices.]

Published: Dec 3, 2015

Keywords: Stock Market; Monetary Policy; Federal Reserve; Reserve Requirement; Quantitative Ease

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