Teasing Out the Effects of QE2 on the Real Economy
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While Fed officials are satisfied with the results from the second round of quantitative easing (QE2), critics are predicting hyperinflation, a loss to the Fed's credibility, and increasing economic instability. Both sides continue to argue whether recent upticks in the real economy are the result of quantitative easing.
Speaking at NYSSA, James Bullard discussed the effects of QE2 and acknowledged the difficulty of teasing out the consequences of monetary policy on the real economy—even in the best of times.