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← A central bank can eliminate a self-fulfilling ('sunspot') debt crisis…

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8 connected korrents · 5 moments on record from 5 Sept 2010 to 21 Aug 2026.

Same subjectSame subjectSame subjectSame subjectSame subjectSame subjectSame subjectSame subject A central bank caneliminate a self-fulfilling('sunspot') debt crisis… OB Olivier Blanchard — holds since 2022-06-01 A fiscal expansion when the economy is already at potential output prompts monetary tightening that dampens or eliminates its effect on output. A fiscal expansion whenthe economy is already… OB Olivier Blanchard — holds since 2022-06-01 A government's debt dynamics are a household's or a company's, except that it can print money and tax -- and those two powers are what change the ending. A government's debtdynamics are a… RD Ray Dalio — holds since 2026-08-21 A longer average debt maturity protects a government from temporary interest-rate spikes and gives it more time to adjust to permanent rate increases. A longer average debtmaturity protects a… OB Olivier Blanchard — holds since 2022-06-01 A persistently low safe interest rate signals that capital is not very productive at the margin, an underlying economic problem rather than a policy variable. A persistently low safeinterest rate signals… OB Olivier Blanchard — holds since 2022-06-01 Aggressive quantitative easing should raise long-term interest rates, because effective monetary stimulus raises them. Aggressive quantitativeeasing should raise… SS Scott Sumner — holds since 2010-09-05 SS Scott Sumner — turned since 2010-09-06 Canceling government bonds held by a central bank creates no fiscal space, because the reduction in government interest payments is exactly offset by an equal reduction in the profits the central bank remits to the government. Canceling governmentbonds held by a central… OB Olivier Blanchard — holds since 2022-06-01 Central bank purchases of government bonds are not bailouts and do not automatically cause inflation, since they only change the composition of the consolidated government's liabilities, not their total. Central bank purchasesof government bonds are… OB Olivier Blanchard — holds since 2022-06-01 Interest rates have little effect on investment, and central banks have limited control over real interest rates. Interest rates havelittle effect on… TC Tyler Cowen — holds since 2023-10-01
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