Dette publique, retour de l’inflation et policy mix : qu’enseigne l’expérience contemporaine ?

The general introduction to the special issue of The Revue française d’économie devoted to « Public Debt & Policy Mix under radical uncertainty », goes in depth through the various challenges fiscal policy as well as monetary policy do face, since rapid inflation is back in early 2021, as a consequence of the Covid 19 virus spured throughout the world, and Russia invaded Ukraine. Those challenges are related to the conditions of debt sustainability within the former regime of low interest rates (too low for long), and how these conditions are changed within fast growing interest rates and inflation. The past two decades experience is analyzed as well as the future, for rich countries but also for poor african countries. This helps to qualify the fiscal dominance observed from 2003 to 2020, and to give some insights about inflation prospects errors made by the FED or ECB, in 2021 and 2022. Now, to what extent fiscal rules can be changed to stop high growing debt, as well as helping monetary policy to stabilize the economy and fight against inflation? The various options are examined, along the debate about « fix rules versus discretion », on the fiscal counterpart as well as the monetary side. For the euro zone, much is needed to combine a new fiscal policy, and build an integrated fiscal stance, able to cope with the ECB and its monetary stance. Thus, greening monetary policy is under tracks, and could help to fund decarbonation fiscal policy, if a decreasing path of public spending is defined.