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November/December 2010, 
Vol. 92, No. 6
Posted 2010-11-01

Doubling Your Monetary Base and Surviving: Some International Experience


The authors examine the experience of selected central banks that have used large-scale balance-sheet expansion, frequently referred to as “quantitative easing,” as a monetary policy instrument. The case studies focus on central banks responding to the recent financial crisis and Nordic central banks during the banking crises of the 1990s; others are provided for comparison purposes. The authors conclude that large-scale balance-sheet increases are a viable monetary policy tool provided the public believes the increase will be appropriately reversed.