Vimal Gor: how modern monetary theory impacts investors
Modern monetary theory is the controversial idea that governments shouldn’t focus so much on balancing the national budget.
Supporters of the theory say governments can expand the economy by freely printing money without worrying about risks such as inflation.
“Firstly, debt levels across the world are very high,” Vimal tells the ABC.
“We can see US corporate debt as a percentage of GDP is as high as it’s ever been in history.
“Secondly, we can see there’s a global economic slowdown coming.
“If we’ve got high debt levels and growth is slowing, but we don’t have much left in the tank in terms of monetary policy — US rates are 2.5% and they’re lower in Australia — there’s very little room for people to move.
“So that’s why there are new theories coming around.”