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Quantitative tightening in the euro area
The Sound of Economics
The Risks of QE
Central banks have dumped a lot of different kinds of operations into the QE bucket, which are very different. The fix for that, as we saw with the Bank of England last fall, is to do more QE and paper over that market dislocation. But there's a real risk in it; first of all, if you do moreQE, then you're just increasing the liquidity needs of banks even more. Then secondly, we have an inflation problem in most of the developed world. And so central banks are trying to hike rates and lean against inflation while also providing QE effectively. They need to restore market functioning. That's QE. they need to set up lending facilities
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