Two monetary concepts that have become completely hollow in OECD countries

Two concepts of monetary theory have become completely hollow in OECD countries. The concept of the long-term neutrality of money, which means that monetary policy has an effect only on inflation in the long term and has no effect on the real economic equilibrium. We are now seeing that there is no link long-term link between money creation and inflation, and that monetary policy is having an enduring effect on real interest rates. So it is no longer known what determines inflation in the long term. The concept of the neutral interest rate, which is the interest rate that balances savings and investment: if shocks increase ex ante savings relative to investment, the neutral interest rate falls. But we are now seeing in OECD countries that changes in savings and investment are having no effect on equilibrium interest rates and that changes in interest rates are not modifying the equilibrium between savings and investment. If interest rates and the savings-investment equilibrium are not linked, then the concept of the neutral interest rate no longer makes sense . It then remains to be seen what may rebalance savings and investment (fiscal policy?).