Report
Patrick Artus

Is Emmanuel Macron a fan of "modern monetary theory"?

" Modern monetary theory" (MMT) claims that it is possible to maintain full employment permanently by running up the required fiscal deficit and by financing it through money creation to prevent interest rates from rising. The ECB has now undertaken to keep interest rates very low in the euro zone. This enables Emmanuel Macron to finance a sharp increase in income transfers to households and cuts in household taxes, mainly through the fiscal deficit. So there has been a shift from an economic policy philosophy that recommended supply-side policies (labour market and training reforms, corporate tax cuts and labour cost reduction) to the " modern monetary theory " philosophy : stimulating demand through an expansionary fiscal policy has no cost if the central bank keeps the level of interest rates low .
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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