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Wednesday, August 28, 2019

Is Fiscal The New Monetary? — Nicola Mai, Peder Beck-Friis


Curiously, no mention of MMT. But useful for the analysis showing that monetary policy is not cutting it and that fiscal policy will inevitably gain in prominence. It is now pretty widely recognized that the period of monetarism spearheaded by Milton Friedman (and the Chicago School) as the "successor" of John Maynard Keynes as international policy guru is over. The question now is, who will the new gurus be? Will the pendulum swing back to Cambridge and Wynn Godley?

FA — Financial Advisor
Is Fiscal The New Monetary?
Nicola Mai, portfolio manager and a sovereign credit analyst and Peder Beck-Friis is a portfolio manager, both at PIMCO

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3 comments:

  1. Matt FrankoAugust 28, 2019 at 10:32 PM

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  2. Matt FrankoAugust 28, 2019 at 10:33 PM

    "Curiously, no mention of MMT."

    The ONLY reason fiscal may be being looked at is that Trump has taken direct action against the perennial export USD zombie surplus nations policies thru tariffs and other threats of executive action ... Trump acting in support of perennial deficit US's domestic employment and production..

    The perennial surplus USD zombie nations are having to start to come up with a contingency Plan B if Trump reelected...

    It has nothing to do with MMT climate nutters...

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  3. Ralph MusgraveAugust 29, 2019 at 4:10 AM

    It’s good to see yet another article echoing the views of the two “know nothings”: Blanchard and Summers (which I’ll shorten to “BS” – no apologies offered for the overtones and insinuation there – ho ho)

    Re the BS claim that “debt is more affordable in the current low interest rate environment”, that’s BS because even if interest rates are high, government and central bank always have to power to simply print money and spending it (and/or cut taxes). Indeed, that’s exactly what several large Western economies have done over the last 5 years or so in the form of QE.

    In short, BS don’t have the faintest idea what’s going on in the World.

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