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China Still Needs Expansionary Economic Policy — Yu Yongding

Summary:
To consolidate its post-pandemic growth momentum in 2021, China should not be in a rush to exit from expansionary fiscal and monetary policy. The government may have to issue more bonds than planned, and the People’s Bank of China may need to implement quantitative easing to facilitate this.The phrase "implement quantitative easing to facilitate this" means that the central bank purchase the portion of the issue required to support the market. This is consistent with MMT's overt monetary financing. The simpler method is just to have the central bank take the issue in first place. The simplest solution is just to issue the currency and leave the reserves created on balance. This would only be matter of change regulation to enable it. The government can always issue the amount of currency

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To consolidate its post-pandemic growth momentum in 2021, China should not be in a rush to exit from expansionary fiscal and monetary policy. The government may have to issue more bonds than planned, and the People’s Bank of China may need to implement quantitative easing to facilitate this.
The phrase "implement quantitative easing to facilitate this" means that the central bank purchase the portion of the issue required to support the market. This is consistent with MMT's overt monetary financing. The simpler method is just to have the central bank take the issue in first place. The simplest solution is just to issue the currency and leave the reserves created on balance. This would only be matter of change regulation to enable it. The government can always issue the amount of currency needed to employ idle real resources and to fund production of needed resources. China appears to get this already, at least in part. It has been explained to them by Western heterodox economists, e.g, Michael Hudson.

Yu Yongding is an insider so what he says is important.

Project Syndicate
China Still Needs Expansionary Economic Policy
Yu Yongding, former president of the China Society of World Economics and director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, served on the Monetary Policy Committee of the People’s Bank of China from 2004 to 2006

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Two new mega-projects connecting Central and South Asia could transform Eurasian security, significantly increase regional economic activity, and potentially bring peace at last to Afghanistan. But most of the world has so far paid little attention to important recent developments.
Central Asia’s Afghan Route to Prosperity
Djoomart Otorbaev, formerly prime minister of Kyrgyzstan in 2014-15

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Mike Norman
Mike Norman is an economist and veteran trader whose career has spanned over 30 years on Wall Street. He is a former member and trader on the CME, NYMEX, COMEX and NYFE and he managed money for one of the largest hedge funds and ran a prop trading desk for Credit Suisse.

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