I came across this cartoon in the New Yorker which in a way could be used to show quantitative easing as well as lower interest rates. Rather than Ben Bernanke’s helicopter drop how about opening the money pipe. Is that Ben Bernanke showing people around with Tim Geithner (US Treasury Secretary) adjusting the flow? New caption – “These two guys have been doing this for well over a year now”
As we know an expansionary monetary policy involves lowering the rate of interest set by a country’s central bank. This should influence the rate of growth of aggregate demand, the money supply and ultimately price inflation. However growth and inflation still eludes the US economy.