What if there's no exit?

Oliver Hartwich | The New Zealand Initiative | 11 June 2013

When the financial crisis started about six years ago, the global policy response was a mixture of monetary and fiscal stimulus. Governments increased spending and hoped for multiplier effects. Meanwhile, central banks slashed interest rates, and when that was not deemed enough, started purchasing assets on a giant scale.

Critics at the time pointed out that the extra government spending might only leave behind more debt and that the multiplier effect, if it existed a...