Central banks all around the world have been printing money. This policy, known as quantitative easing in banker jargon, has driven up the price of stocks and bonds. But will it lead to real and sustainable increases in global growth, or is it sowing the seeds of future inflation? Can central banks print prosperity? Arguing for the motion is Roger Bootle, executive chairman at Capital Economics with Simon Johnson, former chief economist at the International Monetary Fund. Arguing against the motion is Edward Conard, a former partner at Bain Capital with Andrew Huszar, a senior fellow at Rutgers Business School. John Donvan moderates. This conversation was taped on November 18, 2015.
· Economies with central banks that conducted aggressive quantitative easing immediately following the financial crisis are experiencing stronger growth than those slow to adopt it.
· By buying assets from financial institutions, central banks encourage these institutions to lend more to businesses and individuals, which can in turn lead to more spending and investment.
· As individuals and businesses borrow and spend more, more jobs are created and the economy grows.
· There has been very little evidence that quantitative easing has done what it promised to do, and what small gains we have seen have been on Wall Street, not Main Street.
· By distorting the prices of stocks and assets, quantitative easing creates bubbles that can lead to recession.
· If money circulates too rapidly, it is difficult to keep inflation at bay.
· Quantitative easing pumps money into financial markets, allowing governments to ignore the real solution - structural reform of unsound economies.