James Anderson: The era of modern monetary theory has arrived

Stimulus the end of 40 years of 'neo-liberalism'

Dramatic Government intervention post-Covid-19 in the form of aggressive fiscal stimulus will herald the end of 40 years of so-called 'neo-liberalism', as well as the "entire history of orthodox financial thought back to Adam Smith", according to Baillie Gifford's James Anderson.

Governments have followed central banks in attempting to protect their economies and workers as the coronavirus pandemic has seen most economic activity cease as a result of worldwide lockdowns. In the US, that support has totalled $2trn (£1.6trn), with Germany's adding up to €750bn (£645bn). Many, including Anderson, expect the US's debt-to-GDP ratio to exceed 100% - a level not seen since the aftermath of World War II. Multi-asset funds look for inflation hedges as Covid-19 heralds 'final disinflationary flourish' This led Anderson, manager of the £9.8bn Scottish Mortgage inve...