Reckless Easing

Stop the Magic

ARCHIV - Die Nationalflagge Japans weht am 08.08.2013 auf dem Gebäude der japanischen Zentralbank in Tokyo, Japan. Die Zentralbank von Japan gibt am 29.07.2016 ihren Beschluss zur Geldpolitik bekannt. Foto: Franck Robichon/epa +++(c) dpa - Bildfunk+++
Japan is showing that artificially boosting growth through government and central bank stimulus is not the answer.
  • Why it matters

    Why it matters

    Only once we accept that our economies will never grow as fast as they once did can we get on with the business of making our economies healthy for the long haul, the author argues.

  • Facts


    • Interest rates set by central banks are at zero or even below in most developed countries.
    • Central bankers from around the world meet later this week in Jackson Hole, Wyoming, for an annual conference hosted by the U.S. Federal Reserve.
    • Fiscal and monetary stimulus makes sense in times of crisis, but not in normal times when their effectiveness wears down, the author argues.
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It’s a problem that spans much of the globe. Interest rates at many central banks are stuck hovering around the zero point or below. Many countries are in debt up to their neck ruffs.

To raise global growth, some economists think individual countries like Germany could go more into debt. Others instead suggest a new direction for monetary policy, such as raising inflation targets, or giving them up altogether and replacing them with growth targets.

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