Which is better monetary policy - belt tightening or quantitative easing

Ateneo Professor on Entrepreneurship

In the old days, the IMF prescription is belt tightening.  Even in Europe, there are regular protests in UK, Greece and Spain because of budget cuts.  In the PHIL, IMF is often seen as oppressive demon because of the bitter medicine:  higher taxes, more efficient collection and budget cuts.

For the PHL it worked;  it was able to exit the IMF program and is now a donor country.

However, for the rest of the world and it is unfair, as in US more liquidity injection, as it were, putting a distressed patient on more oxygen and IV fluids would be the order of the day.  It is termed as QE by Bernanke.

However is liquidity easing working?

Economist Lindsey Piegza of FTN financial says that the QE will not work, unless there is a certainty in about to expire budget and tax cuts on Dec. 3l, 2012.   The cuts were still from the Bush era.  As for the lawmakers acting on this, there seems to be a lot of inactivity.

The details of the QE was discussed in a previous article.  :Profjorgeentrep on Quantitative Easing post

Economist Piegza says QE by Fed will not improve economy much.  When will the US lawmakers ac?