Low inflation might be the first step towards deflation. Many economists would argue that deflation is a worse situation for the economy because it leads to a sharp drop of consumption and therefore a huge recession follows?
QE in itself doesn't necessarily cause long-term problems. It's about what the state of the economy is when doing so. If you're on a job market recession, oversupply of goods and services, QE is a strategy that could correct the economy with little tradeoff.
Every economic strategy causes tradeoffs somewhere, it's about when, how long, why, etc that matter
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u/StuartMcNight 8h ago
Low inflation might be the first step towards deflation. Many economists would argue that deflation is a worse situation for the economy because it leads to a sharp drop of consumption and therefore a huge recession follows?