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On a quarterly basis, Whitehelm publishes proprietary research on current issues facing the infrastructure sector, and addresses the potential implications and opportunities for clients as the issues relate to their investment portfolios

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COVID-19 & MMT: A Recipe for Inflation?

COVID-19 & MMT: A Recipe for Inflation?

August 2020

The institutional response to COVID-19 has lifted the hood on the direction in which the nexus between fiscal policy and monetary policy may be heading.

In this month’s feature article, we build on our discussion on the ongoing push towards MMT by governments and central banks.  MMT sends shivers down the spines of mainstream economists due to the fear that excessive money printing will lead to runaway inflation in the medium to long term.  This is not a foregone conclusion under MMT, so we explore the short-term and medium-term inflation outlook, caused by both the current economic environment and the fiscal and monetary response to COVID-19.

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