Well that’s not exactly how they put it, but a new study by the Deutsche Bank shows that having central banks try to stimulate economic growth does not work.

As Daniel Lacalle with dlacalle.com writes:

They have analyzed the impact on manufacturing industries from the beginning to the end of these measures, and have found the following results:

1. In eight of the 12 cases analyzed, the impact on the economy was negative

2. In three cases, it was completely neutral

3. It only worked in the case of the so-called QE1 in the U.S., and fundamentally because the starting base was very low and the U.S. became a major oil and gas producer.

As Torsten Slok, the analyst at Deutsche Bank, explains, in eight out of twelve cases the fact that the impact was negative speaks for itself.

“How do you evaluate if QE and negative interest rates are working? When I discuss this with clients, I sometimes get the response that QE and negative interest rates are working well because the payment systems are running and the financial system still functions. But the issue is not if computers can deal with negative interest rates. The issue is if QE and negative rates have been supporting the economy.”

Read the whole analysis here.

I don’t agree that QE worked in the US. I think (as the report points out) the positive performance of the U.S. is due to factors unrelated to QE, such as the increase in energy exports, recent tax and regulatory reforms, and government’s manipulation of economic statistics.

However, it is good to have more ammunition to make the case that giving the Fed control over monetary policy does not promote prosperity.