The global economy is currently experiencing its severest contraction since the 1930s. While capitalism will survive, its fundamental structure can change at critical historical junctures.
Massive borrowing to fund NZ’s economic recovery due to COVID-19 cannot be written off without the risk of worsening the crisis it was designed to meet.
Creating lots of new money is supposed to produce runaway inflation. The longer that it doesn’t happen, the more this branch of economics appears to have a point.
Peter Martin, Crawford School of Public Policy, Australian National University
Reserve Bank Governor Philip Lowe has laid out a road map for measures to drive a range of other interest rates down, now that its cash rate has hit effective zero.
How many people realise that the central banks’ great programme for reviving the global economy involves hand-picking which companies and sectors to help out?
In a speech broadcast live on the Reserve Bank website, the governor explained how quantitative easing would work. He won’t try it until the cash rate hits 0.25%.
MARTIN stands for “Macroeconomic Relationships for Targeting Inflation”. The bank’s new computer model says there’s much it can do to boost the economy after its cash rate hits zero.
The Reserve Bank of Australia says it’s prepared to ease monetary policy further if needed to stimulate the economy. But is the policy working when interests rates are so low?