Former White House chief economic advisor Nouriel Roubini discusses the major limits of central-bank-driven fiscal deficits.

Rose Prince

2019-12-25 19:46:00 Wed ET

Former White House chief economic advisor Nouriel Roubini discusses the major limits of central-bank-driven fiscal deficits. The International Monetary Fund (IMF) projects subpar global economic growth due to the recent trifecta of the tentative Sino-U.S. trade agreement, geopolitical energy tension in the middle east, and a cloudy economic outlook for Britain and E.U. in light of soft Brexit trade uncertainty. These primary global tail risks anchor inflation expectations worldwide, so central banks engage in tacit monetary policy coordination in accordance with the tripartite congressional mandate of maximum sustainable employment, price stability, and financial market stabilization.

With greater government bond issuance, central banks can help fund fiscal deficits that manifest in the form of both tax cuts and infrastructure expenditures. Left-wing proponents of Modern Monetary Theory argue that larger permanent fiscal deficits help stimulate economic growth when central banks monetize these fiscal deficits in the absence of runaway inflation and economic slack.

However, Roubini argues that the current monetization of fiscal deficits cannot be a sustainable policy response in the long run. Either the global economy eventually experiences a supply shock due to pervasive shortages of oil and natural gas, or an inflationary shock becomes a major economic disturbance worldwide.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

Agile lean enterprises break down organizational silos to promote smart collaboration for better profitability and customer loyalty.

Laura Hermes

2020-11-03 08:30:00 Tuesday ET

Agile lean enterprises break down organizational silos to promote smart collaboration for better profitability and customer loyalty.

Agile lean enterprises break down organizational silos to promote smart collaboration for better profitability and customer loyalty. Heidi Gardner (2017

+See More

Business entrepreneurs dare to dream, remain true and authentic to themselves, and try to make a great social impact in the world.

Charlene Vos

2020-07-05 11:31:00 Sunday ET

Business entrepreneurs dare to dream, remain true and authentic to themselves, and try to make a great social impact in the world.

Business entrepreneurs dare to dream, remain true and authentic to themselves, and try to make a great social impact in the world. Alex Malley (2014)

+See More

President Trump announces the new trilateral trade agreement among America, Canada, and Mexico.

Chanel Holden

2018-10-01 07:33:00 Monday ET

President Trump announces the new trilateral trade agreement among America, Canada, and Mexico.

President Trump announces the new trilateral trade agreement among America, Canada, and Mexico: the U.S.-Mexico-Canada Agreement (USMCA) replaces and revamp

+See More

Netflix has an unsustainable business model in the meantime.

Becky Berkman

2019-05-02 13:30:00 Thursday ET

Netflix has an unsustainable business model in the meantime.

Netflix has an unsustainable business model in the meantime. Netflix maintains a small premium membership fee of $9-$14 per month for its unique collection

+See More

President of US-China Business Council Craig Allen states that a trade deal should be within reach if Trump and Xi show courage at G20.

Daisy Harvey

2019-07-15 16:37:00 Monday ET

President of US-China Business Council Craig Allen states that a trade deal should be within reach if Trump and Xi show courage at G20.

President of US-China Business Council Craig Allen states that a trade deal should be within reach if Trump and Xi show courage at G20. A landmark trade agr

+See More

CNBC news anchor Becky Quick interviews Warren Buffett in light of the recent stock market gyrations and movements.

Becky Berkman

2018-04-05 07:42:00 Thursday ET

CNBC news anchor Becky Quick interviews Warren Buffett in light of the recent stock market gyrations and movements.

CNBC news anchor Becky Quick interviews Berkshire Hathaway's Warren Buffett in light of the recent stock market gyrations and movements. Warren Buffett

+See More