The central banks have been nothing to envy in recent years. They had to step in when there was an emergency (and sometimes even when there was no real need) to finance the government’s spending requirements through bond purchases. Monetary policy was at times clearly dominated by the wishes of financial policy. It shouldn’t actually be like that.
Since the feared side effects had not materialized for a long time, some actors and observers believed that they could make a virtue out of necessity: Why don’t central banks simply finance all projects that appear politically desirable? The “Modern Monetary Theory” (MMT) apparently provided arguments for such an approach. But ultimately the MMT concept is half-baked. It is a fiscal illusion.
A conversation between Prof. Dr. Hanno Beck (Pforzheim University) and Prof. Dr. Aloys Prinz (University of Münster), moderated by Dr. Jörn Quitzau (Berenberg)
For more information, see these books:
“Danger to our money? The new prophets of money and the future of our monetary system”
“The economic world is upside down. Farewell to illusions – concepts for a new economic policy”
The regulatory policy journal