A rare regime-change in economic policy is under way that's edging central bankers out of the pivotal role they have played for decades. Fiscal policy, which fell out of fashion as an engine of economic growth during the inflationary 1970s, has been front-and-centre in the fight against Covid-19. Running short of their own tools to juice economies, with interest rates already at zero or below, central banks are now doing the opposite. "Fiscal policy is the big game in town now," said Stephen King, senior economic adviser to HSBC Holdings Plc. It was an early-warning sign that the world's central banks might run out of steam, and bring fiscal policy back to the fore.

Source: Stuff October 11, 2020 18:45 UTC