Quantitative Easing Policy
According to "US economy adds 215,000 jobs in July" (2015), the US unemployment rate has been declined into 5.3%, a 7-year-low rate, which supported as the Federal Reserve said last month that it was continuing to improve, with solid job gains and declining unemployment.
US is one of influenced countries because of consumers, economy, technology, innovation or even politic factors which might control other countries be underneath by them. The QE strategy is a type of monetary policy used by the central bank to stimulate the economy when the regular policy has become inefficiency, thus, US has used it past years ago by cutting off interest rates, pushing a huge money to the economic system on and on until the economy could sustain themselves, so this solution could make money flew into the system, at the same time, the central bank also decreased the interest rate to encourage people to spend more and when people spent much money the industry section would get benefit and reduce a bankrupt risk. Therefore, the overall economy would be better by the government's interfering.
From US economic crisis, it also caused to Thailand's economy after they ended their QE because during US pushing dollar currency into their system, it would make people had more money but could not deposit as the low interest rate so they might invest in another countries which could offered the interest rate highly. Thailand was one of the countries that made a benefit, however, after the end of QE, everything definitely returned back, although, it has had another QEs such as Japan and Euro zone. Nowadays, Bank of Thailand has been decreased interest rate twice since 2015, because of the global crisis, which affect the Thailand's export downward. However, US plans to increase their interest rate if the unemployment rate is falling down to their expected, as quick as, I believe that the situation will become good immediately.
Reference
US economy adds 215,000 jobs in July. (2015, August 7). BBC News. Retrieved from http://www.bbc.com/news/business-33823904
Unfortunately the Australian economy has recently suffered a bit. It is heavily dependent on exports of raw materials, so as the Chinese economy has slowed, so too has the demand for iron ore and other Australian products. I think Australia is still OK, but the dollar is not worth what it was a few months ago. I'm not sure that quantitative easing would help much.
ReplyDeleteYes, as you said Quantitative easing strategy might not help much, QE is just the governments' implement. It depends on each country management, how efficiency they are, as I believe in Japan's QE that would help Japanese economy, not in this time, but I think in the long run.
DeleteI am curious about why the U.S. often use the QE strategy to solve their economy, is there any other policy to enhance the country's economic growth?
ReplyDeleteThere are many many strategies such as borrowing money, reducing citizen's farewell, reducing an interest rate or additional government policy which can support their own economy. For me, I think QE is the last plan to solve and the problem has not happened for a few years but it has occurred almost ten years or more than that.
Delete