Hanno Lustig on Fiscal Dominance, Inflation, and the Effects of Long-term Interest Rate Decline
Macro Musings with David Beckworth
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Is the E C Bs Doin Little Fiscal Policy?
Right now, you could sayo implicitly or effectively, the e c bs doin little fiscal policy on behalf ofof italy and other countries in the e u. But going forward, if the demands become really intense, so it becomes very apparent we got fiscal dominance at work. I would say that the history of the erozone has been exactly about us, about investors trying to figure out what the exact nature of the implicit agreements and coordination between monitory and fiscal policy. It seems like the eroz one has chosen a very obscure coordination mechanism. And it leaves investors struggling to figure out where the back slops are, and who ultimately is going to be paying for all these
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