This from the Adam Smith institute not surprisingly comes out firmly against it
Purely in theory, it sounds possible. An omnipotent and omniscient central bank could perfectly replace the lost money supply, prevent deflation, and stabilize the economy. But unfortunately no such central bank exists.
The trouble is that monetary changes take time to work through the economy. It will be at least a year, for instance, before we can see the impact of the interest rate cuts. So it's really more or less impossible to get a policy like quantitative easing right. It might not have much impact (as in Japan). It might result in another inflationary boom a year or two down the line, followed by another crash like the present one. It could even result in hyperinflation, and the complete economic destruction that would entail.
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