American rescue plans might change the framework we use to understand policy /Megan Greene, FT, 5/7/2021/ but core economic thinking will halt newly reframed policy.
In the post-pandemic world, responsible fiscal policies will return. In all previous chapters of all the crises in economic history they did so. It was rationale in all cases, otherwise a new fiscal crisis would have occurred resulting in an across the board crisis in the economy.
The Spanish Empire went bankrupt several times for not following this rule and finally the Bourbons took over from the Habsburgs.
This side-effect might happen to America if they do not take into account prudent macroeconomic thinking.
Governor Matolcsy, MNB, the Central Bank of Hungary
Re “Joe Biden’s experiment could revolutionise economic thinking”
