Easy Monetary Policy
Cure or Curse?
17 Jun 2020
eabh in cooperation with Allianz Global Investors
Harold James (Princeton University) and Eric Barthalon (Head of Research Allianz SE) will take a long-term perspective on easy monetary policies and their implications.
The discussion will be followed by a networking lunch.
Post Great Financial Crisis, major central banks have cut rates to, or below zero and have provided unprecedented amounts of liquidity to the system ever since. After first steps to normalise monetary policy, we have seen a renewed round of monetary easing in 2019. Further, the COVID-19 crisis in 2020 brought back discussions about helicopter money and direct credit to the banking sector. Our experts will address the following topics together with the audience:
- Is the neutral real interest rate negative today?
- Is the Global Savings Glut theory valid or is it flawed?
- Has modern monetary policy been asymmetric and conducive to the blowing of credit and asset bubbles?
- What are the long-term implications of today’s monetary policy?
- Is there anything to learn from the debate between the Banking School and the Currency School?
- How effective is monetary policy currently?
- In times of Covid-19 and the global health crisis, which is the role of central banks? Should they provide credit to the non financial sector directly or indirectly via the banking sector? Do we know of any historical precedents?
- Are central banks and governments likely to ‘go all in’ during the Corona crisis with Helicopter Money and increased money supply following Modern Monetary Theory (MMT)?
- Should the current debate encompass a debate about our monetary institutions (fractional reserve banking, 100% money, helicopter money)?
- Which lessons can we learn from economic and financial history?
- What are the proposals for policy makers?
- What are the implications for investors and society as a whole?