QUANTITATIVE EASING: A KEYNESIAN CRITIQUE

Modigliani-Miller On Capital Structure: A Post-Keynesian Critique

The celebrated Modigliani-Miller (hereafter MM) proposition that the value of the firm depends on its profitability and not on its capital structure (Modigliani and Miller 1958) is avowedly an application to the field of finance of the doctrine that money is neutral. The broad purpose of this paper is to call into question the claim for the neutrality of money in the particular case of the mone...

Quantitative Easing and Financial Stability∗

The massive expansion of central-bank balance sheets in response to recent crises raises important questions about the effects of such “quantitative easing” policies, both their effects on financial conditions and on aggregate demand (the intended effects of the policies), and their possible collateral effects on financial stability. The present paper compares three alternative dimensions of ce...

The Macroeconomic Effects of Quantitative Easing

Did Quantitative Easing Increase Income Inequality ?

The impact of the post-meltdown Federal Reserve policy of ultra-low interest rates and Quantitative Easing (QE) on income and wealth inequality has become an important policy and political issue. Critics have argued that by raising asset prices, near-zero interest rates and QE have significantly contributed to increases in inequality, while practitioners of central banking, counter that the dis...

When and How To Exit Quantitative Easing?

S ince the onset of the financial crisis in late 2007, the Federal Reserve has injected an astronomical amount of money into the economy through its large-scale asset purchase (LSAP) programs. According to former Fed Chairman Ben Bernanke (2009, p. 5), the essence of LSAP is “credit easing” (CE)—that is, reducing the cost of private borrowing by direct purchases of privately issued debt instead...