Quantitative easing: definition
First Branch of the White River, Vermont, Edward Hopper 1938 Willem Hendrik Buiter , Chief Economist at Citigroup, proposed in December 2008 in a post on its Financial Times Blog (he was at that time Professor at the London School of Economics), a terminology to distinguish quantitative easing , or an expansion of a central bank's balance sheet, from what he terms qualitative easing , or the process of a central bank adding riskier assets onto its balance sheet: Quantitative easing is an increase in the size of the balance sheet of the central bank through an increase in its monetary liabilities (base money), holding constant the composition of its assets. Asset composition can be defined as the proportional shares of the different financial instruments held by the central bank in the total value of its assets. An almost equivalent definition would be that quantitative easing is an increase in the size of the balance sheet of the central bank through an increa...