Monetary stimulation - does it work?

Ivan Trofimov  | van Eyk | 12 April 2012

Despite the recent decision by the US Federal Reserve to postpone another round of quantitative easing (QE), the issue remains salient, as both the EU and Japan are now embarking on their own QE. Two questions remain unanswered as to the appropriateness of this policy:
1.  firstly, will QE be sufficient to kick start economic growth in the developed economies; and,
2.  will high inflation necessarily ensue?

Central bankers have been devising monetary policies taking into ...