Quantitative easing in the euro zone: Everything depends on the use of excess money

Quantitative easing means that banks and non-bank economic agents hold excess money. The effects of quantitative easing depend on how banks and non-bank economic agents use this excess money: do banks increase credit supply? Do non-bank economic agents buy more goods and services or more assets? Developments in the euro zone show that the effects of quantitative easing seem to be: An upturn in bank credit; A fall in the household s’ financial savings rate and an increase in their housing purchases; An increase in corporate bond purchases by investors, all of which is positive.