4. [By Allison Schrager, November 22, 2022]

It's Now Clear That QE (Quantitative Easing) Was a Colossal Policy Mistake

There's no convincing evidence that central banks' purchases of trillions of dollars of bonds and other financial assets helped any economy.

The great quantitative easing experiment was a mistake.

It's time central banks acknowledge it for the failure it was and retire it from their policy arsenal as soon as they're able.

Based on the above information, please answer the following questions: (30%)

(1) Please describe the direct costs of QE for the central bank. Please also describe the indirect costs of QE for the economy in terms of risk assessment. (10%)