housing market when so many homeowners are
including crude, which would be a "negative" for
underwater and cannot sell and unemployment,
import bill for oil importing countries like India,
already above 8%, threatens to rise?
while exports are "unlikely to be boosted significantly" as the overall economic impact
Effects of Quantitative Easing Quantitative
Easing
may be limited. Higher oil prices will keep India's is
fundamentally
a regressive redistribution program that has been boosting wealth for those already engaged in the financial sector or who already own homes, but
current account deficit "elevated". To put it simply: More Quantitative Easing is not going to move the dial much on the growth meter.
passing little along to the rest of the economy. Also lowering of interest rates may actually have negative impact on the economy as people dependent on the interest income may spend less in
response to their reduced income. However,
the Federal Reserve has assumed that the ad-
Rajat Garg
vantages of the low interest rates outweigh this
MBA-Banking, NMIMS,
effect.
Mumbai
On European Union In the European Union, World Pensions Council’s financial economists have argued that QE3-induced artificially low interest rates will have an adverse impact on pension funds in EU. As under-funding condition of pension funds, as without returns that outstrip inflation, pension investors may face the real value of their savings declining rather than racketing up over the next few years.
On India India, like EU, is unlikely to benefit too much from the Federal Reserve's new asset purchase program me. QE3 is likely to boost global commodity prices, 22