What is the Cantillon Effect?

When the US Federal Reserve and other major central banks embarked upon their quantitative easing programs shortly after the Global Financial Crisis many feared that the impact would be inflationary.

In an open letter to then Federal Reserve Chairman Ben Bernanke, twenty-three of the most recognised economists, investors and analysts outlined their concerns:

“We believe the Federal Reserve’s large-scale asset purchase plan (so-called “quantitative easing”) should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable…