Federal Reserve building in Washington
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How does the US's QE programme work?

13 June 2013 Last updated at 06:49 BST

Global markets have been shaken in recent weeks by concerns that the US Federal Reserve may begin scaling back its stimulus programme.

The Fed is pumping $85bn (£54bn) a month into the economy, in a programme of quantitative easing (QE).

But what is QE exactly?

Sharanjit Leyl asked Nobel Prize winning economist Thomas Sargent about the mechanics of QE and what the impact may be.