“Although quantitative easing (QE) has short-term benefits, if it continues its long-term costs may be severe, warns Nouriel Roubini, a New York University economics professor, in an article for Project Syndicate.
If QE postpones deleveraging in the private and public sectors too long, it may create “an army of zombies: zombie financial institutions, zombie households and firms, and, in the end, zombie governments,” Roubini says, calling for it to be phased out over time.
Roubini, chairman of Roubini Global Economics, questioned the effectiveness of ongoing QE. Bond yields are already low and banks are hoarding liquidity. Prime corporate and household borrowers don’t want or need to borrow, and those who need to borrower cannot….”
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