QUANTITATIVE EASING AND ITS EFFECTS ON INVESTMENT & GDP GROWTH

Open Access
Author:
Baker, Nicholas Joseph
Area of Honors:
Finance
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • Brian Davis, Honors Advisor
  • J. Randall Woolridge, Thesis Supervisor
Keywords:
  • Quantitative Easing
  • Federal Reserve
  • GDP
  • Investment
  • Capital Expenditure
  • Interest Rates
  • US Economy
  • Future Potential GDP
Abstract:
The purpose of this paper is to determine any side effects quantitative easing had on the US economy after the Great Recession. More specifically, the paper looks into investment decisions made by companies in the S&P 500 right after the three rounds of quantitative easing. During the financial crisis, the Federal Reserve used unorthodox monetary policy tools to prevent a more severe recession. Many outcomes of quantitative easing have become apparent and many are still being studied today. This paper will look specifically into capital expenditures by companies during a time when interest rates were suppressed to the lower bound. The paper will conclude with an analysis of how these investment decisions impacted Gross Domestic Product growth within the US economy.