Banks, QE, and Money Printing

Published in November 2020, 'Banks, QE, and Money Printing' by Lyn Alden provides a detailed explanation of the mechanisms behind quantitative easing and its relationship to money printing.

The work clarifies common misconceptions about QE, showing that while QE increases base money and bank reserves, it does not immediately increase broad money or consumer inflation.

Alden explains how QE recapitalizes banks and sets the stage for future inflation by increasing lending capacity, but the money largely remains within the banking system initially.

The analysis also covers the role of primary dealers, the Federal Reserve's balance sheet, and the distinctions between base money and broad money.

This paper is considered a definitive resource on the topic and is available online on Lyn Alden's website.