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More Bucks, Less Bang in Store if Draghi Drives QE Higher
The European Central Bank could ultimately be in for a let down if it ramps up its mass bond-buying program in March. The charts below explain why adding to so-called quantitative easing will probably elicit diminishing returns — and why policymakers may do it anyway. Quantitative easing can boost the economy by pushing down the interest rates that companies and households pay on loans. At its start, there was evidence that QE achieved this in the euro zone, as the chart above shows. But cutting rates lower at this point might have little effect in boosting economic activity: Businesses that were waiting for low ... (full story)
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