Date of Award

Summer 8-1-2017

Degree Type

Report

Degree Name

Master of Science (MS)

Department

Applied Economics

First Advisor

Dillon Feuz

Second Advisor

Devon Bailey

Third Advisor

Vijay Kannen

Abstract

The recent financial crisis has raised awareness among the public regarding the role the Federal Reserve has in the broader economy, primarily as it pertains to overall price levels, and especially to commodities. Has the implementation of quantitative easing had an effect on underlying commodity prices and, if so, to what degree? Specifically, has the rise in the money supply created a subsequent rise in prices that are transferred onto the end consumer? This paper surveys the recent empirical evidence of the policy of quantitative easing as it relates to the money supply and commodity prices. It then uses this evidence to analyze the macroeconomic effect of this policy on such prices. It is concluded that this form of quantitative easing has had an impact on overall commodity prices and that the long-term results of this policy are as yet undecided. This paper ends with a discussion of the potential avenues of research that may be pursued in the future to expand the understanding of money supply and the use of quantitative easing as a viable instrument of monetary policy.

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