Abstract
This paper examines the effects that the first round of the large-scale assert purchases known as Quantitative Easing (QE1) had on US stock prices. The paper focuses on the time period starting from the announcement of QE1 to before the second round of Quantitative Easing had been announced. This paper hopes to find a significant effect of stock prices in China as well as the exchange rate between the two countries, as the US and China are major trade partners. The effects of Chinese stocks and the exchange rate will be compared to the lower interest rates that had resulted from QE1. Since this paper is only examining stock prices during QE1, the goal is to see how effective QE1 was at responding to the financial crisis of 2008.
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