Abstract

Abstract:

Europe is experiencing its gravest economic crisis since the Second World War. In response, governments have undertaken radical measures. In France, Emmanuel Macron suspended many taxes, rent, and other bills for businesses and promised no company would be allowed to collapse. Germany is "tearing up its fiscal rule book," as the Financial Times put it, finally abandoning its obsession with balanced budgets to fight the crisis. Many countries have essentially nationalized payrolls, promising to cover the wages of workers who would otherwise have been laid off. In the UK, Andrew Bailey, the Bank of England governor, declared that the central bank was willing to pump unlimited quantities of money into the economy to support businesses and households, essentially embarking on an experiment in Modern Monetary Theory.

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