As part of our partnership with Forbes magazine, read an opinion piece by Anne-Sophie Alsif (BSI Economics, BIPE) and Domitille de La Touanne (BIPE), whichexplains the consequences of the expansionary monetary policy currently being pursued by central banks.
On March 18, 2020, the European Central Bank (ECB) announced its €750 billion emergency plan to tackle the Covid-19 crisis. This colossal sum was accompanied by comments from its President, Christine Lagarde, who declared that « there are no limits to our commitment to the euro. » This massive support plan raises questions about the origin of this money creation and leads some to talk about « magic money. » This concept is similar to money creation without a direct correlation to wealth creation in the real economy. It often carries with it the risk of higher inflation, asset price bubbles, or even calls into question the independence of central banks.
Click here to read the opinion piece
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