Dr Sam Wylie

So not cutting the interest rate, but quantitatively expanding the amount of money.

The central bank does that by buying government bonds.

It won't help us much to talk through all of the technical details of it, but suffice to say that the RBA writes big checks to buy bonds from Aussie Super, from AMP, from whoever else has got government bonds.

And then the bonds go into the Reserve Bank, the central bank, and money comes out into the economy, into circulation.

and ends up in bank accounts and ends up in people's purses and wallets.

So it was, you know, people say it's the printing of money.

It's not literally the printing of folding currency, but it is the creation of money and it does pump up deposits.

And a lot of it was done in Australia in the COVID-19 crisis.

A huge amount.

Deposits are way up.

Deposits are up $600 or $700 billion from what they were before COVID-19 started.

So it's that process.

It's the emergency thing that a central bank does and has never happened in Australia before COVID-19.

Quantitative easing is the emergency extraordinary thing that's done when the normal thing of cutting interest rates has hit the bottom.

And we can't pull the lever down any further.

So let's start with the technical definition and then we'll unpack it.

So you were saying, Owen, that you didn't want to hog all the time.

Well, I'm conscious of hogging all the time.

Well, I'll try not to bang on for too long.

But the technical definition is that for two quarters, that means two lots of three months, for six months, the economy is shrinking instead of growing.