The constellation of low interest rates, large government deficits, and bond buying by the central bank had first emerged in Japan in the 1990s. It went hand in hand with a downward trend in price increases that ultimately resulted in deflation. After 2008, it had become common to the euro area and the United States as well—though in the U.S. the deflationary tendency was less pronounced. The central bank policy of government bond buying became known as quantitative easing (QE).
