Exiting Quantitative Easing Could Trigger Uncontrollable Inflation, Study Warns
The article discusses how a central bank may struggle to control the amount of money in circulation after stopping a policy of injecting money into the economy. The researchers used a simple model to show that if the bank has to absorb a lot of extra money, it may lose control over the money supply. This could lead to too much money being created, causing inflation. The model helps identify when a central bank might face this difficult situation.