When QE began after the recession in 2007-08, the world had critized US & the Europian countries for QE - specially the BRIC nations. How ever it is seen that since then the developing markets too have grown tremendously and come out of recession. More ever now when tapering was annoucned the developing markets seem to be impacted the most. So it raises a question whether QE was good or bad for India?
Is Quantitative Easing in the developed countries, good for developing countries like India?
QE was basically where governments started printing money in thin air and started buying government bond and debt, providing liquidity to the markets. Liquidity was very important during the crisis we were in in 2008-09, but now everyone is used to that extra liquidity being provided by the FED and any word that they will reduce (Taper) that liquidity usually causes capital markets to react negatively.
Liquidity is always good for markets in shorter term, as usually this liqudity comes chasing higher returns, so would typically come to developing countries. But in the longer run, it will be tricky to figure out how it will play out, it is the first instance in history of mankind when so much liquidity has been provided by the central banks, especially the FED.