Medicaid Expansion and Mental Health Outcomes

Quantitative Easing (QE) is a non-traditional monetary policy tool used by central banks to stimulate economic activity during periods of economic downturn or uncertainty. In the United States, to combat the economic fallout of the 2008 financial crisis, the Federal Reserve implemented several rounds of QE (commonly referred to as QE1, QE2, and QE3) significantly expanding its balance sheet through large-scale purchases of U.S. Treasury securities and mortgage-backed securities. These interventions were designed to restore stability to the financial system and stimulate economic recovery. My research explores how this policy disproportionately benefited individuals who held financial assets, particularly stock market holdings, as they experienced substantial appreciation in their net worth during and after the QE periods. Conversely, individuals without these asset classes (often from lower-income brackets) saw little to no comparable gains, thereby widening the existing wealth gap. My study analyzes individual-level data, provided by the Federal Reserve Economic Database (FRED), from 2006 to 2019 and employs a generalized Difference-in-Differences econometric model to estimate the effect of QE, measured by the percentage of purchased treasuries, on net worth across treated and untreated populations. My results of this study offer insight into the distributional consequences of this unconventional monetary policy and its role in shaping long-term inequality between wealth classes.