The Effects of Quantitative Easing on the Economic Growth of the United States

In the dark times of the economic crises of 2008, The United States implemented economic policies that were uncommon and unorthodox to many of the economists. An economic activity known as Quantitative Easing (QE) was performed in which the FED provided liquidity to the market by purchasing financial assets from the government and the private sector. Some economists agree with the decisions made by the FED, whereas others are not so optimistic about them. In this study I analyze how the economic growth of United States is affected by different variables including QE. I conducted a multiple regression analysis over the period of Jan 2006 to July 2021-with GDP growth rate being the dependent variable and the independent variables being QE (M2 money supply rate), Inflation rate, Interest rate and Exchange rate (USD to EUR). The results showed that there is a strong negative relation between the GDP rate and M2 money supply rate which shows that QE might have rescued the US economy through the recession though not considering the consequences it could lead to.