How do quantitative easing policies impact income inequality and what are the potential downsides and benefits of using such monetary tactics to stimulate an economy in recession phases?
Answer 1
Emma Rios
Quantitative easing (QE) can exacerbate income inequality by primarily benefiting asset holders, as it increases asset prices. Benefits include lower borrowing costs and increased liquidity, potentially stimulating economic growth. Downsides involve potential long-term inflation and asset bubbles, which can destabilize the economy.
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