On 18 February, William White made a webinar presentation to the Global Risk Institute, a Toronto based think tank, with Jason Stewart as the Moderator. The presentation was based on a forthcoming Working Paper to be published by INET. White questions the wisdom of having relied so much on monetary policy to provide economic stimulus, particularly over successive cycles. By encouraging the accumulation of debt, often for unproductive purposes, monetary stimulus becomes increasingly ineffective over time. Moreover, it threatens financial stability in a variety of ways, leads to real resource misallocations that lower potential growth, and finally produces a “debt trap” that cannot be escaped without significant economic costs.
