Are the effects of Quantitative Easing (QE) policies on financial crises positive or negative?

You've hit on a crucial point, buddy. This issue has been debated for decades, and even economists themselves haven't reached a consensus. I'll try to break it down for you in plain language, without all the jargon.

Just imagine Quantitative Easing (QE) as the central bank, the "master control" of the economy, seeing things are about to go south. So, it directly fires up the printing press and starts "showering money." But it's not directly giving money to you or me; it mainly buys "long-term bonds" (think of them as valuable IOUs) from banks and other large financial institutions.

When this happens, the amount of money circulating in the market surges.

Positive Impacts: The Role of a Firefighter

When a financial crisis first erupts, QE definitely acts as a "firefighter," primarily doing the following:

Preventing an outright economic collapse: During a financial crisis, people are too scared to spend or borrow, and banks are afraid of bad loans, so they stop lending. The entire economy is like a car running out of gas, about to stall. QE forcibly injects liquidity into this pool, getting money flowing again, at least keeping the engine from dying. In 2008, without QE, many large companies and banks might have collapsed, and the consequences would have been unimaginable.
Driving down lending rates: When the central bank buys a large number of bonds, bond prices go up, which in turn pushes interest rates down. Lower interest rates mean lower borrowing costs for businesses to expand production, and less loan pressure for ordinary people buying homes or cars. Theoretically, this encourages more borrowing, spending, and investment, revitalizing the economy.
Boosting stock and housing prices: All that extra money has to go somewhere, right? A lot of it flows into the stock and real estate markets. When asset prices rise, people who own homes and stocks feel "richer" (this is called the "wealth effect"), making them more willing to spend, which can also stimulate consumption to some extent.

In short, in times of crisis, QE is like a powerful stimulant given to a critically ill patient, aiming to save their life first and prevent the economy from falling into an irreversible "Great Depression." From this perspective, its positive impact is immense; it's a "necessary evil."

Negative Impacts: A Host of Side Effects

However, this medicine comes with significant side effects, especially in the long run:

Widening wealth gap: This is one of the most criticized aspects. Who benefits most from asset appreciation? Naturally, it's those who already have money to buy stocks and real estate. Ordinary wage earners, with few assets, not only don't enjoy the benefits but may also have to bear the burden of inflated housing prices and living costs. The result is that the rich get richer, and the poor get poorer.
Inflating asset bubbles: Too much money and excessively low interest rates make people prone to "investing recklessly," putting money into unreliable ventures, or pushing stock and housing prices far beyond their actual value. This creates "bubbles," and bubbles always burst eventually, potentially leading to a new crisis.
Risk of inflation: With so much money pumped into the market, and the supply of goods remaining the same, it's only a matter of time before money loses its value. You can see how global prices have soared in recent years; this is inextricably linked to the rampant QE by central banks over the past decade or so. Your wage increases might fall far behind the pace of rising prices.
"Central Bank Dependency Syndrome": The market gets used to the central bank acting as a backstop, expecting it to inject liquidity at the slightest sign of trouble. This makes financial institutions bolder and more reckless in their decision-making (since the central bank will bail them out if things go wrong), sowing the seeds for future risks. This is called "moral hazard."

To summarize

So, is the impact of Quantitative Easing (QE) on financial crises positive or negative?

In the short term, it's largely positive: It acted as a powerful firefighter, successfully preventing the global economy from completely collapsing in crises like 2008. Without it, we might have faced a much worse situation.
In the long term, it's largely negative: It's like a steroid-like drug; while it saved lives, it left behind many side effects, such as wealth disparity, asset bubbles, and inflationary pressure—issues we are still grappling with and enduring today.

Overall, QE is a reluctant measure, choosing the lesser of two evils, taken only in emergencies. It cured the "acute illness" but left behind many "chronic conditions" that require long-term management.