Where have all the deficit hawks gone? With mainstream politicians no longer comparing government finances to household saving habits, it appears that a new wave of fiscal spending is on the horizon.
This is part of a growing debate around Modern Monetary Theory, also known as MMT or “a dangerous proposition” if you’re the ECB, about why spending should only be constrained by inflation, how unemployment exists by choice, and that fiscal policy should be the main tool to control economic cycles.
In a world where central banks have become persistently more dovish as inflation targets are missed, the tenets of MMT mean that it has become much easier for politicians to run up larger deficits. In this episode, we explore the potentially radical implications this theory and the changing political landscape could have for inflation and investors’ portfolios.
· Alex Mack, Fixed Income Fund Manager
· Mark Chappel, Senior Content Manager
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