Financial Crisis and Quantitative Easing: Can Broad Money Tell Us Anything?

23 Pages Posted: 25 Aug 2012

See all articles by David Cobham

David Cobham

Heriot-Watt University - School of Management and Languages

Yue Kang

Heriot-Watt University; University of Stirling

Date Written: September 2012

Abstract

When the Bank of England introduced quantitative easing (QE) it emphasised effects on money and credit, but much of its empirical research has focused on effects on long‐term interest rates. We use the flow of funds to analyse the implications of QE for broad money, and argue that the financial crisis, fiscal expansion and QE may have constituted major exogenous shocks to money. Regressions in which the growth of nominal spending depends on the growth of nominal money and other variables suggest that money has had a much larger role in the period of the crisis and QE.

Suggested Citation

Cobham, David and Kang, Yue, Financial Crisis and Quantitative Easing: Can Broad Money Tell Us Anything? (September 2012). The Manchester School, Vol. 80, pp. 54-76, 2012. Available at SSRN: https://ssrn.com/abstract=2135970 or http://dx.doi.org/10.1111/j.1467-9957.2012.02323.x

David Cobham (Contact Author)

Heriot-Watt University - School of Management and Languages ( email )

Edinburgh EH14 4AS, Scotland
United Kingdom
+44(0)131 451 3495 (Phone)
+44(0)131 451 3296 (Fax)

HOME PAGE: http://www.sml.hw.ac.uk/Staff_Profiles/DavidCobham.html

Yue Kang

Heriot-Watt University ( email )

Riccarton
Edinburgh, EH14 1AS
United Kingdom

University of Stirling ( email )

Stirling, Scotland FK9 4LA
United Kingdom

Register to save articles to
your library

Register

Paper statistics

Downloads
0
Abstract Views
382
PlumX Metrics
!

Under construction: SSRN citations will be offline until July when we will launch a brand new and improved citations service, check here for more details.

For more information