Freshly printed US$20 notes are processed for bundling and packaging at the US Treasury's Bureau of Engraving and Printing in Washington, DC, in July 2018. Independent central banks provide a check on governments’ money creation. Photo: AFP
Opinion
Opinion
Macroscope
Unlimited government spending? Modern monetary theory is a seductive but dangerous idea
- As recession looms and monetary easing options dwindle, the theory that governments can ‘borrow from themselves’ to finance unlimited spending is becoming attractive. But it hinges on complicit central banks buying up government debt
Freshly printed US$20 notes are processed for bundling and packaging at the US Treasury's Bureau of Engraving and Printing in Washington, DC, in July 2018. Independent central banks provide a check on governments’ money creation. Photo: AFP
Leaders of the world's seven richest democracies attend a forum on the international economy, trade and security in Biarritz, France, on August 25 at the annual G7 Summit. Photo: AFP
Opinion
Opinion
Macroscope
Falling stocks and a slumping global economy mean a welcome return to economic stimulus, as austerity and deregulation exit
- Governments everywhere are turning to stimulus, it seems, to stave off the very real risk of global recession. This return to Keynesian-centred solutions must avoid boosting inequality again, though; governments should agree on a global ‘New Deal’
Leaders of the world's seven richest democracies attend a forum on the international economy, trade and security in Biarritz, France, on August 25 at the annual G7 Summit. Photo: AFP