THE Federal Reserve has ended its roughly US$3.7 trillion programme of bond buying, leaving in its wake a host of hard questions. Did it strengthen the economic recovery? If so, by how much? What are the long-run effects? Should it be used again? We don't have good answers.
We need a dispassionate accounting of its successes and shortcomings, because the bond buying represents the most significant economic-policy innovation to emerge from the 2008-09 financial crisis. Instead, the subject is defined by a patchwork of disconnected studies and much bewildering jargon. The bond buying itself is called both "quantitative easing" (known as QE) and "large-scale asset purchases" (LSAPs).