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The combined effect of these actions was that the monetary base more than tripled in size.
The monetary base has increased at an annual rate of almost 25% over the past two years.
And there has, indeed, been a huge expansion of the monetary base.
The monetary base has more than tripled; trillion-dollar deficits have gone on for years.
Central banks can expand the monetary base, but this may not lead to broad money accelerating.
This would require backing the monetary base with reserves of foreign exchange.
Even very large increases in the monetary base will have no effect if seen as temporary.
A tripling of the monetary base would not cause runaway inflation.
And in such circumstances a rise in the monetary base does not lead to inflation.
The monetary base could eventually expand by $1 trillion in this way.
QE works in theory by expanding the monetary base, which then should feed through into broader monetary measures such as bank lending.
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