This somewhat pessimistic perspective is far from being conventional wisdom. While productivity has increased less rapidly in recent years than during the first three-fourths of the 20th century, per capita income (a statistic available over a longer time span) is still rising more quickly than it was even during the second Industrial Revolution.
Clearly, government bond purchases can be a legitimate and effective monetary policy tool. But, they risk blurring the line between ﬁscal and monetary policy. The problems are particularly pronounced in a monetary union with ﬁscally autonomous member states. Here, such purchases involve the fundamental risk of mutualising sovereign liability risks through the central banks’ balance sheets.