Interest rates at, or below, zero and massive monetary expansion by central banks is helping the Republic and other countries to meet the cost of the pandemic. But how long will this last? Is it back to austerity to pay for the pandemic or on to a future boosted by cheap money?
Introducing an Irish Fiscal Advisory Council conference on the topic this week, chairman Sebastian Barnes said that the central question for budget policy is how to make sense of today’s very high national debt levels and very low interest rates. This may generate, he said “the biggest questions macroeconomics had faced in decades with major implications for fiscal, monetary and financial policies.”