Quantitative easing of Federal Reserve System and its effect on US economy

Presented thesis describes unconventional instrument of monetary policy quantitative easing of liquidity by increasing reserves of commercial banks held at the central bank accounts. This instrument was implemented during the greatest economic crisis since the 1930s by all the major monetary authorities to reduce real interest rate at the time of depleted standard monetary policy tools. Thesis deals with the transmission channels, historical and present experience and process of quantitative easing in the US. The potential threats associated with the massive release of liquidity to the market at a time of economic and financial crisis, the right strategy and the timing of exit and subsequent normalization of monetary policy are also discussed. Using correlation analysis relationships between the total volume of reserves and other financial indicators are identified. Most of the anticipated relationships has been confirmed, only their strength may not correspond with notion of central bankers when this instrument are implemented