Walking a tightrope

Is a low-inflation, low-growth environment the new normal?

Globally, policy circles are now debating the reducing efficacy of unconventional monetary policies being used by global central banks to support growth and the need for other levers, including counter-cyclical fiscal policies. The rise in such activism is on account of the fact that these unconventional policies have not been able to generate inflation despite very low rates across the yield curve, often moving to negative territory. This limits the space of monetary policy to deal with a future slowdown. ‘

Proponents of counter-cyclical fiscal policies advocate putting money into the hands of those who would spend it, thus improving aggregate