Monetary Policies under the Influence of « Fiscal Dominance »

The financial crisis has contributed to setting up, in advanced countries, a new type of « policy mix » characterized by fiscal dominance. The health crisis has radicalized its forms and intensified its use. This article first proposes to describe how it works, then to analyze its limits. The return of inflation and a risk of financial instability have indeed led this regulatory system into a dead end. To get out of it, the best solution would certainly be to return to stronger and more sustainable growth. We then seek to define the directions to be taken and the means to be used to achieve this.