Quantitative Easing - A detailed understanding of quantitative easing, the process, intentions and outcomes
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@tamim34637 жыл бұрын
using econplusdal parents as Application in the exam.. lol
@DevinaParmarSixthАй бұрын
I sincerely love this man
@SimiMode9 жыл бұрын
Thank you so much! The good news is I have now finished my Alevel economics & thanks to you & Your videos, I understand the economy very well relatively to last year when I was new to Economics, and had idea about your videoes. The bad news is that I'm gonna miss the sound of your voice everyday, I used to listen to your tutorials literally everday because I was doing all four units. Thanks so much. You have definitely made a positive impact in my academic life and I really want you to know that. Sharing one's knowledge is the most selfless act of all.
@melonheadcsgo98144 жыл бұрын
Ms Mode just shut the fuck up
@ta71744 жыл бұрын
A Neek From Alabama just unnecessary 🙄
@trrift37813 жыл бұрын
@@melonheadcsgo9814 wtf is wrong with u
@leonardowilhelmdicaprio9993 жыл бұрын
@Gordon Rayan Here come the bloody spambots....
@eshankhan240826 күн бұрын
the glazing tho
@NikV013 жыл бұрын
The great thing about your videos is the passion you show. I can tell you genuinely enjoy teaching economics and the subject as a whole shown by your enthusiasm. I learn a lot from these so thanks.
@anishvyas16935 жыл бұрын
This guy is fully saving me in every year of my degree, better than the lecturers 😂😂
@TaariqSiddik4 жыл бұрын
@@melonheadcsgo9814 condom*
@amina46472 жыл бұрын
a king truly, been watching your videos since I was in Year 10, and still continue to come back to them all the way in my Masters degree, I and so many are grateful for your teaching Dal, thank you
@emant83962 ай бұрын
I have watched 3 other vids (from white guys), read from the notes and the A Level book. But nobody can explain better than you sir.
@seadrown6252Ай бұрын
White guys catching strays 😢
@M_Maluva3 жыл бұрын
This is the best economics channel
@darth22052 жыл бұрын
Quick, and straight to the point. Dal you are awesome!
@Shishir11109 жыл бұрын
Very very helpful video. Thanks for educating the finance lovers all around the globe
@fonyterguson50482 жыл бұрын
you’re literally THE BEST!!!!
@DanielDjFoZZiFoster5 жыл бұрын
Fantastic! This is a difficult concept to understand. You made it very easy and logical! Much better than most videos out there! Just missed out on the FX side of this - the downside is that the currency depreciates relative to other currencies (in short run however with an unknown effect for the long run). So controversial.
@melonheadcsgo98144 жыл бұрын
Fuck
@danielhearne-potton77103 жыл бұрын
Why is that controversial? The UK is in a structural deficit on the current account, so a depreciation should help to boost their competitiveness and hence increase export revenue.
@Anonymous-xr8hx3 жыл бұрын
@@danielhearne-potton7710 he was referring to the unknown effect in the long-run. If it in fact appreciates the exchange rate in the long run it will result in a further worsening of the current account deficit.
@amankataria19979 жыл бұрын
A very helpful video for my A2 Economics exam for AQA. Given that its in the specification and its not mentioned in Nelson thornes, this was an invaluable video. THANK YOU sir.... p.s if you could make a video on the EU (last chapter for Macro) and also on globalisation & international trade, that would be very helpful for all students taking the exam.
@EconplusDal9 жыл бұрын
aman singh These are coming. Stay tuned!
@amankataria19979 жыл бұрын
Thanks sir. Once again, I appreciate all your time and effort!
@janmeppe7 жыл бұрын
bruh you the best, really needed this. your efforts are extremely appreciated!
@manav46572 жыл бұрын
In Dal I trust
@Peter-qx3rt8 ай бұрын
Thank you very much for this explanation.
@austinwachira5185 Жыл бұрын
Well explained, Thanks!
@flumeee4 жыл бұрын
Hi, i got a question on how QE causes economic growth for a 15 marker but as im writing all the point i think i will make form into 1 and so i end up about 2 paragraphs short, any tips?
@alessioreghezza70677 жыл бұрын
Thank you very much for the comprehensive video about QE. I think that one of the causes of the failure of conventional monetary policies in the aftermath of the Global Financial Crisis ( Great Recession, "sub-prime".... you name it) was mostly due to the constrains of the ZLB (zero lower bound) plus the other problems you mentioned. I would add also the "balance sheet channel" not just for firms (as you mentioned) but also for banks that can be better off in term of a reduction of non-performing loans and costs related to the latter. Nevertheless, i would also mention the negative effects of unconventional tools if there is a different sensitivity of deposit and lending rates ( both should decrease) that somehow can reduce bank net interest margins (because of the "stickiness" of deposits). If there is a contraction of net interest margins banks profitability fall, capital is eroded and the ability of banks to lend reduced. Hence, we are again as at the beginning!!! Waiting a new video about NIRP!! Thanks
@FrayRS9 жыл бұрын
Hey, thanks for all the videos. How many more videos are there to come in your A2 Macroeconomic Playlist?
hi thank you for such a helpful video, but i have to ask is the only difference between quantitative easing and normal open market operations the fact that the govt creates the electronic money first? Bit confused since I thought buying bonds was how govts stimulate the economy anyway thanks
@RoyZorba3 жыл бұрын
The central bank creates electronic money not the government. Government can't create money so they ask central bank to lend the money in exchange of government bonds, central bank buys government bonds and gives the newly created money to the government. The central bank and government are two separate entities working together in an economy. QE is a vast topic so it's okay be confused many times.
@hristoangelov34608 жыл бұрын
This is Brilliant !!! Damn !!!
@melonheadcsgo98144 жыл бұрын
My reaction to the Armenian genocide
@georgewhite13689 жыл бұрын
Thanks for the explanation. Confusing subject, helped a lot!
@sephwatson3407 жыл бұрын
How does QE's efficacy change when interest rates approach zero?
@guptavish6 жыл бұрын
An excellent explanation, thank you so much!
@nishenator9 жыл бұрын
Hi there, thanks for the videos, very helpful. Was wondering if you are planning to make one on globalisation? thanks
@amankataria19979 жыл бұрын
Nish Patel I would recommend this Sir
@_trm_4339Ай бұрын
Lmaoooo I watched this video 1 hour before my exam and it came up in a 12 marker this year 💀💀💀💀 biggest snipe in history istg
@monkeymanmacho22054 жыл бұрын
Don’t banks pay the coupon rate to their bond holders? Hence wouldn’t a decrease in yield for corporate bonds not affect their borrowing?
@george_hdg9524 Жыл бұрын
You’re my hero
@adem10002 жыл бұрын
Top guy.
@yungkidlines Жыл бұрын
How does this differ from open market operations?
@user-be1qx3om6k Жыл бұрын
Top G !!
@pajeetsingh Жыл бұрын
Who gets the interests on those bonds that Central Bank buys as part of injecting money? Sure it will be in their credit balance and they could buy more bonds with that. Does this implies Central bank will always have surplus assets in comparison to Government and Private sector? Does the design of Central banking system requires a single top most creditor with infinite credit?
@grahammackenzie35093 жыл бұрын
Its all about reducing risk, but through QE you are devaluing your base currency, how do you undo it? or is it a one way road?
@rubsr41763 жыл бұрын
It is. You cant "undo" it altho governments try to increase tariffs and take money supply away from the economy when inflation hits. These are just prolonging the hyper inflation thats caused by this induced increase in price levels by the government.
@philipstallwood98134 жыл бұрын
Thanks, good explanation
@melonheadcsgo98144 жыл бұрын
philip stallwood okay Philip okay okay yeah okay 👌
@kanyirichege43522 жыл бұрын
MO knows wagwan.
@tanglin179 жыл бұрын
Brilliant explanation as usual. Thank you
@RezurrectedNuke9 жыл бұрын
Sean McCarthy It is a great video isnt it?
@RezurrectedNuke9 жыл бұрын
Sean McCarthy Wait hang on, are you the Sean McCarthy
@RezurrectedNuke9 жыл бұрын
Sean McCarthy I dont believe it, it cant be you.. Hows life treating you in the kalahari desert
@RezurrectedNuke9 жыл бұрын
Sean McCarthy Sean McCarthy, My name is Peter Ruwanda Maganda, I would deeply appreciate a response from you and would like to catch up with you as soon as possible. Merci bon Avoir
@adityamisra88695 жыл бұрын
anyone else got exam on 20th may 2019??????????????
@gregfoster59225 жыл бұрын
yep
@yeetothehaw26585 жыл бұрын
mines on the 22nd tho. good luck to yall!
@adityamisra88695 жыл бұрын
Yee to the Haw how what exam Board are you!
@yeetothehaw26585 жыл бұрын
im taking CIE haha. what about you?
@nas43316 жыл бұрын
When the government is buying government bonds from financial institutes, does this mean the government buys government bonds the it previously sold, from these financial institutes?
@rubsr41763 жыл бұрын
Yes. Government, in times of boom where the market price is inflating and bullish, tries to cut down money supply to stabilise it, so it issues bonds and takes money away from the economy. In times of depression, inorder to increase demand and start production, the government tries to increase money supply by taking those bonds back and providing liquid money for it.
@InbredMammoth8 жыл бұрын
how does a decrease in the yield of corporate bonds create a decrease in general interest rates?
@Fudgey10108 жыл бұрын
Banks often raise finance by issuing corporate bonds, and the yield reflects essentially the interest rate on the bond - how much they have to pay back in addition to the amount they've borrowed. The yield falling means the amount they have to pay back has gone down, so it's cheaper for them to raise finance and then lend it out. If it's cheaper for them to get finance, they're gonna be more willing to then lend it out to consumers at a lower price (almost like the standard argument that they can charge a lower price but maintain profit margins because costs have fallen). That's my understanding anywayz
@samuela7752 жыл бұрын
@@Fudgey1010 love u man
@santi0442 жыл бұрын
love u bro
@NexusAuthority7 жыл бұрын
can someone clear up point five a bit confused on why the interest rates fall
@danielhearne-potton77103 жыл бұрын
Probably a bit late, but I think it's because the yield of corporate bonds falls, meaning that the high-street banks can easily sell these bonds (since the yield/amount they pay back falls, so the cost of repaying the holder of the bond falls). This means banks can increase their liquidity by reselling the corporate bonds that they held, so they have more money (which is liquid). If the high street banks have more spare money, they are more willing to loan out money, which means they'll reduce their interest rates.
@RoyZorba3 жыл бұрын
The financial institutions (banks) buy so many corporate bonds when the central bank gives them newly created electronic money, buying excessive corporate bonds leads to higher bond prices and lower yields (corporates bonds are higher in demand). The financial institutions (bond holder) buy corporate bonds at lower price and sell it at higher price, making huge profits (raise finance). By raising large amount of finance (cash) means banks have more money available to lend the customers which leads to lower interest rates/ reduces the cost (interest) of borrowing. I tried to keep it short. 😂
@ric6383 Жыл бұрын
Well done. Slowly getting round to QE, though I tend to go with the more pessimistic evaluation of Economics Foundation. Electronic money conjured out of thin air and given to banksters. Close on 0.5 trillion, much better giving it straight to firms that actually produce goods and services rather than waste it on these quasi-parasites.
@rm99944 жыл бұрын
Are these videos geared towards A level economics?
@nayanpatel81063 жыл бұрын
yes
@gradinzuzi25362 жыл бұрын
Econplus undefeated, even in 2021
@joesouthwell17205 жыл бұрын
Legend
@maxhutchinson1117 Жыл бұрын
the absolute fucking GOAT
@amir55363 жыл бұрын
🐐🐐🐐
@FootyfansFC Жыл бұрын
THE GOAT
@user-bt6hc4mb7y4 жыл бұрын
if the yield of corporate bonds decreases, how does this make borrowing cheaper? thank you
@nathanpeart6263 жыл бұрын
Because the decrease in the bonds yield means that the issuer doesn’t have to pay back as much interest to the lender, meaning the government can borrow more for less
@MrArdzman9 жыл бұрын
To what extent can we use QE as a criticism of Friedman's LRPC? He states that any inflation would be caused by an increase in the money supply (QE in this instance), but as we have seen in Europe and in the US, inflation rates have remained minimal despite this.
@edwardbond51929 жыл бұрын
Ardi Janjeva All the QE money went into the stock/ housing market, hence why there is inflation in those markets. So technically QE has inflated prices
@aladinoj.manhica61244 жыл бұрын
Good lecturer. God bless you
@Hxuehhxiwb3 жыл бұрын
anyone in covid time?
@formerlybn27865 жыл бұрын
4 weeks till my exams and I still don’t understand this 😭
@jolt09l5 жыл бұрын
bro i feel you
@jason-os3jg5 жыл бұрын
2 weeks@@jolt09l
@deristickhd63135 жыл бұрын
2 hours
@vdmur79523 жыл бұрын
how
@dhruvshah71123 жыл бұрын
@@deristickhd6313 How did it go? Mine is in less than 24 hours.
@chrisjohn84094 жыл бұрын
how can we assume that there would be greater demand for corporate bonds when banks decide to invest in them
@melonheadcsgo98144 жыл бұрын
Chris John okay so basically erm to do this you need to erm shut the fuck up, draw the graph of sin(x)
@rubsr41763 жыл бұрын
theres intrinsically demand for government bonds or gilt edged securities because 1) theyre secure as theyre issued by the government and low risk 2)they offer tax concessions/rebates. 3)Unlike the capital market which deals with long term financial assets, money market -mostly dominated by government- deals with short term asset making it highly liquifiable. These features along with the bond's supply price and prospective yield over time creates demand for it.
@RoyZorba3 жыл бұрын
The banks buy so many corporate bonds with the newly created money circulated to them by the central bank. Buying excessive corporate bonds increases the demand of bonds which means increase in bond's price, later bank sell this bonds at higher price and make profits or If I say in the words of economics "raise finance to lend the customers".
@redzxelite2262 Жыл бұрын
if only i watched this video before today
@lifelover44846 жыл бұрын
Only works in the long run if the u.s. is the only country in the world. Already there is much talk about creating a new reserve currency and let's not forget Bitcoin :)))
@danieledwards99302 жыл бұрын
love dat babes
@leafypath72904 жыл бұрын
I can sense the saltiness at 2:12-2:40, if only his parents got the loan...
@john-blair3 жыл бұрын
I found this confusing. It is my understanding the government issues government bonds - not financial institutions - they would only issue corporate bonds, and it is only the buying of corporate bonds by the government that injects money into the economy. A company buying a government bond is lending money to the government i.e. taking money out of the economy. what am i missing?
@Anonymous-xr8hx3 жыл бұрын
The government is essentially purchasing its own government bonds, increasing their price and thus disincentivising firms and households from purchasing them.
@RoyZorba3 жыл бұрын
The central bank and government are two separate entities working together. Government ask the central bank to create money to expand or save the economy. Central bank lends the money to government by buying government bonds at cheaper rate through circulating the newly created electronic money to many financial institutions (government/corporate banks). Financial institutions creates new mutual funds, securities, investment schemes inside them contains government bonds, government ETFs and also corporate bonds, corporate stocks altogether. Financial institutions are connected with central bank and through financial institutions, central bank buys the government bonds. This way newly created money then goes to the government and also to the corporates listed in stock market and also to the consumers. The government uses newly created money run government institutions, railways, schools etc. Corporates uses the newly created money to expand or save their business from collapse and consumers get those money from financial institutions by borrowing it at lower interest rates. Hence, it's the central bank that injects the money into the economy by buying a lot of government bonds.
@john-blair3 жыл бұрын
@@RoyZorba It is not clear from your answer - does the Central Bank buy government bonds, or does it circulate the newly created money to financial institutions? Also, does the central bank buy the government bonds from the government or from other financial institutions who have previously bought government bonds, and will now have the new money to invest elsewhere? Thanks.
@RoyZorba3 жыл бұрын
@@john-blair I'm happy to answer again, QE is really vast and deep. I will dig a little deeper. - Central bank is the father of all the financial institutions, the relation of central bank and financial institutions is same as the relation of a father to his children. Every financial institutions operates under the supervision of central bank. Financial institutions are not independent entities. Financial institutions can be owned by corporates or government but each and every financial institutions in a country is operated by the central banks. The employees of the financial institutions are hired and salaried by the corporates/government, small functions like account openings, fund transfers are carried out by financial institutions. Operations like lending money and selling mutual funds/investment schemes are carried out under the supervision of central bank. The employee of the financial institutions are only allowed to lend money if the central bank has given them a green signal. The central bank is the trunk, financial institutions are the branches and the leaves are the consumers in an economy. Financial institutions doesn't have any rights to print or create new money, they run on the profits made from their customers. Central bank doesn't rely on profits because central bank is the creator of all the money in an economy, only the central bank holds the right to make new money. Government bonds are just pieces of paper just like currency notes, these government bonds can only be created by government, they can create bonds without any limit like the central bank can create money without any limits. When there is an economic downturn or a need to expand the economy. 1) The government requests the central bank to save/expand the economy and only the central bank can save or expand the economy. The government offers their bonds (pieces of paper) to central bank, these bonds have no value (0). The central bank has the right to refuse the government but If central bank agree to save/expand the economy. Than 2) The central bank take these government bonds which have 0 value, creates new money electronically and circulate these newly created electronic money along with government bonds (value=0) to all the financial institutions in the country. The financial institutions get two things, the new electronic money and the government bonds(0). Than 3) The central bank orders every financial institutions to create new mutual funds/investment schemes and put these government bonds inside those newly created mutual funds/investment schemes along with the corporate bonds, equities to balance the portfolio. The financial institutions follow the orders of the central bank and create hybrid mutual funds/investment schemes. Than 4) The central bank tells financial institutions to buy those mutual funds/investment schemes with the new money. The financial institutions buys their own newly created mutual funds/investment schemes with the new money circulated to them by central bank. Than 5) The new money goes inside these mutual funds/investment schemes. But inside these mutual funds/investment schemes contains government bonds and so the newly created money went to the government through bonds. The government bonds which previously had 0 value is worth some value now because it is bought by financial institutions by newly created money of the central bank. 6) The new money goes to the government and other corporates through mutual funds, the government will now use these new money to give salaries to government employees and also will use the money to run schools, public transport, government factories, mines etc. The corporate will use the new money to save/expand their business, pay salaries to the employees and will create new goods and services for the consumers. 7) The central bank buys government bonds indirectly but never hold it. The short time holder of the government bonds are financial institutions. These financial institution will sell these mutual funds/investment schemes to their customers and then customers will become the final holder of the government bonds. 8) The last holder of the government bonds becomes the public who buy these mutual funds/investment schemes from the financial institutions. The financial institutions raise finance by selling mutual funds/investment schemes to the public and use the raised finance to lend the other customers. 9) The financial institutions lend the same money they got by selling the mutual funds/investment schemes, they try to overcome the inequality under the supervision of the central bank. Government/corporate use the new money to pay salaries to employees (public) and carry on other functions. The new money reaches to everyone through different ways. 10) In the end if the economy does well, the central bank request back the money from all the financial institutions, the financial institutions transfer the money electronically to the central bank and then central bank deletes the money they created electronically in the beginning. In this way central bank balances the inflation and deflation. In general, while explaining in short sentences we say "central bank buy government bonds" but central bank never buy or hold the bond, they give newly created money to government and corporates indirectly through financial institutions in exchange of bonds given to the public in the end. Central bank never seek to make profit by making investment because they are the creator of the currency, they can create cash as much as they want. Central bank always try to balance the economy by regulating all the financial institutions.
@john-blair3 жыл бұрын
@@RoyZorba Thanks for making the effort to explain further. Much appreciated.
@xinchengdu12154 жыл бұрын
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my daarg
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Your names gooner do you know what that is
@OliverJames-tt7cyАй бұрын
Love you daddy dal
@dazfriend60995 жыл бұрын
LeT's TalK qE
@vedhasitlani67923 жыл бұрын
i love you
@thepersongaminghd76654 жыл бұрын
0.38 is happening now due to coronavirus
@thechaoticneuron4 жыл бұрын
Why can't governments print as much money as they want? Check out the comprehensive data backed analysis on the issue here- dsaikrishna.wordpress.com/2020/04/14/what-is-helicopter-money-and-quantitative-easing-will-they-help-the-economy/