World's central banks are now begging govts to power economic rebound

Without aggressive fiscal stimulus now, economies may develop deep scars that hobble growth over the longer term. That could then leave central banks unable to prepare for the next shock or recession

Just eight months after they swung into action to avert a crippling depression and credit crunch, central banks are in the uncomfortable position of relying on governments to power fragile economic rebounds.

The decisions their counterparts make will affect not just the growth outlook for the next few quarters, but could shape central banks’ policy options, and even their credibility, for years to come.

Monetary authorities entered the Covid-19 crisis with the least conventional policy space -- namely, interest-rate cuts -- of any postwar downturn. After pulling down borrowing costs near or even below zero and deploying massive asset-purchase programs, they are