Gita Gopinath

And we talk about resilience.

So in a case where...

We end up with just debt levels that are really high.

It's just costs going up everywhere.

And that will eventually slow down economies, if not just trigger a financial crisis right away, given how sanguine financial conditions have been.

If a central bank comes out and says that we are different from our mandate of price stability and full employment, regardless of what's happening there, if we are going to go out and buy long-term debt, then what's going to happen is you're going to see inflation expectations drift up.

And then the nominal rates are going to go up.

And real rates will also go up because of the risk associated with inflation.

Premium will go up.

And that will be the end of the wonderful era that we've had of central bank independence.

And that's helping to keep interest rates low.

So.

That strategy just doesn't exist.

You can play with it for a little while, but eventually it gets priced into markets.

So, I mean, unless, of course, it is a tool for monetary policy because you've hit the zero lower bound and you still need to simulate the economy, then you do that.

But right now, we're far from the zero lower down.

We have the opposite.

So it is countries try have tried it in the past.

And these are usually the countries that the IMF works with because they eventually find themselves in crisis.

But what typically happens is you get a tiny period when it looks like this is helping and then you just get much higher interest rates and you just don't get any of the benefits of the central bank buying.