The threat of “fiscal dominance” has been of mainly academic interest in recent decades, at least as far as advanced economies are concerned. People came to take for granted that central banks and monetary policy led the way on short-term macroeconomic policy, acting independently of governments to discharge their price-stability mandate and obliging fiscal policy to fall into line for stabilization purposes. This presumption of monetary dominance, if you will, has worked well, keeping inflation low at relatively little cost. Which is why it became so entrenched.
Before much longer, the US seems likely to cast it aside. The conditions ...