Question

what are negative consequences of quantitative easing?

Answer 1

Quantitative easing- This is a strategy that can be used by the central bank to increase the domestic money supply.
Negative consequences -
In case of an increase in the money supply by the central bank, inflation may be caused.
Inflation may be caused by the central bank through quantitative easing without the growth of the economy that may lead to a period of Stagflation.
Quantitative easing might not be effective if the increase in the supply of money does not work its way by the banks and into the economy.
Domestic currency can be devalued by quantitative easing. It might be helpful for the manufacturers in the stimulation of growth because exported goods will become cheaper in the global market. However, the falling value of a currency makes import more expensive which can lead to an increase in the cost of production and levels of consumer price.