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“just in case will replace just in time”

When former US Treasury secretary Lawrence Summers delivered his famous address on the return of secular stagnation at the IMF in 2013, he revived interest in a Keynesian construct that had fallen into disuse since the 1940s.

 As he puts it, “just in case will replace just in time”, with the private sector wanting to hold greater financial reserves in case of further shocks to globalised markets. 

Monetary policy as we know it has become redundant. Central banks’ golden era is probably over.

Gavyn Davies FT 31 May 2020

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