Is quantitative easing really effective?

First, we recall that quantitative easing in reality is merely a reduction in the maturity of the public debt. So if short-term securities and bonds are highly substitutable, it has very little effect on the economic equilibrium. We then look at the United States, the euro zone, the United Kingdom and Japan to determine the role of quantitative easing relative to the decline in short-term interest rates in explaining the decline in long-term interest rates. We find that: Quantitative easing has played no role in Japan; It has played a huge role in the United States, the United Kingdom and the euro zone; It is the stock of money created by the central bank and not the flow of money creation (flow of bond buying) that explains long-term interest rates.