Monetisation of public debt: The government cannot ignore the way money is used

Monetisation of public debt by central banks initially leads to private economic agents holding (directly or indirectly by institutional investors) a considerable additional amount of money. Governments cannot then ignore the way this excess holding of money is used: It can be consumption or investment; It can be speculative uses or uses that simply lead to bubbles (real estate, equities in sectors already favoured by investors, etc.); Or it can be growth-enhancing investments (in companies' equity, in innovation). It is therefore necessary to introduce financial instruments and incentives to encourage this third type of use of excess liquidity, and avoid the second.