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The Myth Of Central Bank Stimulus And Economic Recovery

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The United States wrapped up its unprecedented quantitative easing program late last year and now Europe is wading into those very same waters in the hopes that it will kick-start its economy and prevent deflation. Considering that we're facing improving growth this year, it seems - on the surface at least - that central bank action works to prevent recessions and trigger economic booms.

However, much like the deceptively calm surface of a river, there are powerful currents running just beneath that are the real deciding factors.

The argument for or against central bank involvement in the economy has been a hotly debated political issue for decades, but we're going to take politics out of this debate and focus on just the issue at hand.

Does monetary stimulus help the economy or not?

Case #1: The United States

Since 2008, the US has embarked on a historic… Read More …