Someone needs to do something to keep the world economy afloat, and central banks are the only agents capable

The solution is straightforward. It is to fix the problem of deficient demand not by attempting to further loosen monetary conditions, but by boosting public spending. 

Governments should borrow to invest in research, education, and infrastructure. 

Currently, such investments cost little, given low interest rates. 

Productive public investment would also enhance the returns on private investment, encouraging firms to undertake additional projects.


Barry Eichengreen