What the Heck Is Quantitative Easing?  Last week, the Federal
Reserve announced a third round of quantitative easing, or what
is referred to as QE3. This is an open-ended purchase of $40
billion a month, along with a commitment to keep rates low until
“a considerable time after the economic recovery strengthens.”
Many economic commentators are saying that this is a serious
change in economic policy. In order to understand why this is so
important to our economy now, it might be helpful to go back to
an academic debate about Japan in the 1990s.  The era from the
early 1980s through the financial crisis was referred to as the
“Great Moderation.” It was common for economists to assume that
the Federal Reserve and other central bankers could control the
economy effortlessly, basically picking the unemployment rate
they wanted. Prominent economists who studied macroeconomics,
the field created during the Great Depression to study economic
crashes, thought everyone in the discipline should pack up and
go home. Robe