David Ramsden: QE as an economic policy tool - what does it do and how should we use it?

Speech by Sir David Ramsden, Deputy Governor for Markets and Banking of the Bank of England, at the Peter Sinclair Town Hall lecture, University of Birmingham, 17 February 2021.

Central bank speech  | 
03 March 2021

Introduction

It's a pleasure to be speaking today at the University of Birmingham, and an honour to be doing so at the third Peter Sinclair Town Hall lecture.

My focus today is on quantitative easing – QE for short – and its use as an economic policy tool.

The Bank of England's internal Independent Evaluation Office (IEO) published its own evaluation of QE earlier this year, where it noted that "there remain open debates about how QE works in different states of the world, its broader interlinkages and its potential limitations".1 What I want to use my lecture for today is to set out my own views on QE as a policy tool, as well as contribute some thoughts to some of those debates.

Before I do that, though, I want to start with my own recollections of Peter. Tim Harford began this lecture series last autumn by noting that he was an economist because of Peter, as is true, I am sure, of many people joining us today. I can actually take it further. I was first enthused by economics by one of Peter's students, the late Ken Durham, like Peter also a great teacher and educator, who taught me economics at school and encouraged me to apply to Brasenose College.