IndexQuantitative EasingBritain's exit (BREXIT) from the EUThe economic cycle and the circular flow of incomeConclusions I will discuss three topics. In the first part of the essay I will explain what Quantitative Easing is and how effective this policy has been in achieving growth in the EU. Next, I will discuss how Britain's exit (BREXIT) from the EU could affect Ireland, assuming an appreciation of the euro against the pound in the coming years. Finally, I'll explain a topic I learned this year and how it improved my understanding of how the economy works. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay Quantitative Easing “Quantitative easing is an unconventional monetary policy in which a central bank purchases government bonds or other securities from the market to lower interest rates and increase the money supply.” (Investopedia) This policy is designed to inject money directly into the economy. This happens because consumers and businesses start spending less, so demand decreases, which means there won't be enough money in the economy. inflation target of 2%. This is when, for example, the Bank of England creates new money electrically to make greater asset purchases from the private sector. Eg: pension funds, insurance companies, banks and non-financial companies monetary policy makes these decisions along with the inflation rate and purchases of these assets on a monthly basis. There are numerous government bonds, so it is possible to purchase them in large quantities quite quickly. Quantitative Easing does not involve printing money, but creating money digitally. When a bank injects money into the economy it works in different ways, when a bank buys assets it increases the price of the asset and reduces the return as it spends the money on the asset in the name. This means that asset sellers will invest the money they receive in other assets, such as bonds or company shares. If the yield is lower, the cost of borrowing is also lower, which encourages households and businesses to spend more. The Bank of England also buys small private debt from companies in bonds, this pushes companies to raise funds and invest in their businesses. If people deposit more money into their bank accounts, commercial banks have more funds which they can then invest in new loans. Higher bank landings support spending, spending represents an injection into the economy. This technique can be very risky because banks keep reducing their assets and it can cause problems in case of crisis, that's why the best thing banks can do is buy assets from companies other than banks. With money pumped into the economy, banks should be able to increase spending to help keep inflation on track. and reach the 2% target. Without this stimulus, money injected into the economy would be too low, spending would decline, and, eventually, inflation would also fall below the 2% target. With this technique the improvement of the economy can boost business and consumer confidence, which then helps to achieve the expected inflation rate of 2%. (Bank of England, 2018) In 2016 the ECB announced that Quantitative Easing will be extended until at least December 2017. They reduced QE from 80 billion euros to 60 billion euros per month. At that stage many economists discussed and underlined the possibility of its failure. The reasons were the huge amount of bad loansowned by banks, which led to greater conservatism and less investment despite the greater amount of liquidity available to banks. They said quantitative easing has a huge downside. Banks could take excessive risks by buying risky bonds, so-called junk bonds, which could lead to huge losses. Economists argue that the benefits may only be short-term. The ECB adopted an effective policy in 2014 called the “Long-Term Target Refinancing Operation” (TLTRO). It involves lending money to banks at a relatively low interest rate, but then the banks had to target their lending to households and businesses. Through this policy the economy could have improved and kept interest rates low, however, the ECB stopped working with this policy because it did not see the short-term result. One of the benefits of QE could be increased international trade around the world. This was the case at the end of 2016. (Tosi, 2016) Recently the European Central Bank decided to stop its €2.4 trillion bond-buying program by the end of the year. The interest rate was at an all-time low and the ECB said it would remain unchanged until at least mid-2019. As a reaction to this, the euro began to fall, Ricardo Garcia, the eurozone's chief economist, suggested that the decline in the euro will pass. (Hudgson, 2018) However, Mario Draghi said that the ECB's monetary easing has been "very effective" and will continue to stimulate growth and inflation until 2020. He said that they will bring the inflation rate back to near or below below the 2% required, but you need to be patient, we will do it in the medium term. The ECB will stop buying bonds and reinvest those already purchased. (Jones, 2018) After all we can say that the quantitative easing monetary policy partly worked in the EU, the inflation rate was really low and the ECB hoped that it would remain unchanged, however they decided to stop working with this policy as soon as it has become risky and they have bought too many bonds, which they now have to reinvest. Britain's exit (BREXIT) from the EUThe United Kingdom voted to leave the European Union in June 2016, the actual separation is expected on Friday 29 March at 11pm UK time 2019. There are some issues on which the EU and the United Kingdom are working to resolve them. These issues are: What happens to UK citizens living abroad and EU citizens living in the UK. What happens at the Northern Ireland border? How much does the UK owe the EU? There will be a 21-month transition period, allowing businesses and others to prepare for post-Brexit rules between the UK and the EU. The government has said Ireland will be hit hard after Brexit. The UK is the second largest consumer of Irish goods. Northern Ireland, which belongs to the United Kingdom, is the only land that borders Ireland. When the UK leaves the EU, the free movement of products and people will end. (Symington, 2017)There are two possible outcomes of Brexit. Hard or soft Brexit. Soft would mean the UK would be left with similar membership of the European Economic Area to Norway, so the country would still have access to the single market while being able to strike deals without the rest of the EU. Free access for European citizens to work and settle in the UK would also continue. Hard Brexit is the opposite: the UK would be out of the single market and free to negotiate new trade links. Ireland is expected to be the country most affected by Brexit in the EU,.