- Glenn Stevens, Reserve Bank of Australia Governor
While delivering a speech on the world's economy, Reserve Bank of Australia Governor Glenn Stevens said governments should rely more on infrastructure projects rather than dropping "helicopter money" into individuals' bank accounts in order to underpin growth and inflation. The Governor said that policy makers need to look for tools other than low interest rates to boost economic growth. After the financial crisis in 2008, central banks lowered their policy rates dramatically, with many reaching zero bound. Stevens said it was evident that monetary policy has been unable to stimulate the desired speed of economic growth. The actions taken by central banks were effective during the crisis, Stevens admitted. However, policy was "always going to have limited capacity to accelerate the recovery".
Regarding the prospects for future growth, Governor Stevens said he believed it was "a bit too pessimistic" to say the world had entered a stage of "secular stagnation", where the desire to save is increasing, while opportunities for profitable investment are weak, as recently suggested by former US Treasury Secretary Lawrence Summers.
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