Central banks should throw quantitative easing (QE) out of the monetary policy toolkit because there’s no proof that it leads to better economic outcomes, former RBI governor Raghuram Rajan said. “I would put it on the shelf until we figure out more about it,” Rajan said. “I do not think the benefits outweigh the costs,” he added.
QE was launched during the 2008 financial crisis because interest rates couldn’t be cut any further and the economy needed support. Under the programme, major central banks created trillions of dollars to flood the banking sector with liquidity.