Fed's QE will boost U.S. exports: Morgan Stanley

Quantitative easing (QE) by the Federal Reserve will boost U.S. exports, said Manoj Pradhan and Joachim Fels, economists at Morgan Stanley. 

Because of the size of the U.S. economy, the circulation of the U.S. dollar, and its reserve currency status, the Fed's efforts to print money and debase its currency will ripple throughout the world.

Emerging markets countries, which are growing faster economically and whose currencies offer higher yields, will be flooded with dollars and they will eventually buy more U.S. goods as a result, said Pradhan and Fels.

Economies with low inflation and moderate economic growth will probably want to keep their currencies low to boost exports. So as dollars flow into their financial system, their central banks will accumulate them and issue domestic currency. This will boost domestic liquidity, which will lead to economic expansion, higher incomes, and consequently greater demand for goods, including those from the U.S., said Pradhan and Fels.