Financial Instability, Sovereign Debt, Inflation, Fiscal Spending – Q&A Session
By Tae-Sik
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May 22, 2024
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~12 min read
Question: Excessive money printing and fiscal spending are often cited as causes of financial instability. However, if a government issues bonds and the central bank buys them (essentially monetizing the debt), wouldn't this just lead to inflation without necessarily creating other problems? Answer: Excessive money printing and fiscal spending can indeed lead to financial instability, […]