So if QE2 has already done what it's going to do, does that mean that our problems are already solved? Certainly not, because our problems were much bigger than any of the weapons in the Fed's limited arsenal. I do think that QE2 may be modestly helpful in terms of making credit more available to small businesses, encouraging a little more refinancing to enable more spending, encouraging net exports, and breaking the deflationary psychology that may have been a factor in so much cash sitting idle.
More than that, I do not ask or expect from the Fed.
That's Professor Hamilton at Econbrowser.