Sentences with phrase «central bank financing»

Huge and increasing central bank financing of government; 6.

Extreme risk aversion has abated; spreads have narrowed; capital markets have continued to thaw, though in some overseas cases this has relied heavily on central bank financing activities.

Turner also argues that we should reject the «taboo» of direct central bank financing of government deficits.

Friedman himself argued back in the 1950s that all expansion of the money supply should come from central bank financed government deficits rather than from new credit creation by the banking system.

The first was inflationary central bank financing of the fiscal deficit.

He noted that the economy is saddled with increasing inflation, high interest rates, declining real GDP growth, massive increase in the public debt stock, huge and increasing central bank financing of government, etc..

Of course, the fear in that case is not bankruptcy but that central bank financing of future deficits will stoke inflation.

This allowed the Government to fully fund its requirements in the market place, without recourse to central bank financing (and all the adverse consequences for monetary growth associated with that kind of financing).

The concept is that the government runs a larger budget deficit than it would otherwise and the central bank finances it by creating new money and depositing it in the government's spending account.

There is a prejudice here that central bank financing of a domestic spending deficit by government is inflationary.

While this sounds like monetary madness, it should be remembered that Ben Bernanke, former Chair of the US Federal Reserve, urged such action on the Japanese government a decade ago to deal with that country's deflationary crisis, and referenced Milton Friedman's argument that a central bank financed stimulus via a «helicopter drop» of money could have saved the United States from the Great Depression.

Problem is, central banks finance their bond - buying sprees by creating money essentially from thin air, and economists fear this will eventually cause a spike in inflation.