In recent years, major central banks have been doing what they could to stimulate business activity and inflation. But the results have been meager, growth and inflation have remained sluggish. Correspondingly, the focus is now shifting to fiscal policy. With low interest rates in the US and even negative rates in Japan and the EMU, governments should be borrowing and spending more to get the economy moving and to reach societal goals. Calls for more spending can be heard in the US and in the EMU, especially with respect to Germany and other surplus countries. International organizations like the IMF and the OECD and the central banks themselves are shifting their focus to fiscal policies. Also the new EU Commission is proposing higher spending for a green deal, financed by bonds that the ECB would be capable of buying.

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