ABSTRACT
This chapter looks at how New Economic Thinking can help sharpen the issues and help focus discussion on how central banking helps in finding viable solutions to the pressing social issues of our times. It examines the rise of central bank balance sheets and the pattern of increasing concentration in real and financial markets. The chapter discusses the political economy of such concentration and question whether financial engineering is a solution to real sector gaps and inequities. It explores central banks entered into unconventional policies because political economy of fiscal policy was unable to act decisively and deal toughly with the financial crisis. That forced central banks into the policy vacuum to use monetary policy instead of fiscal and structural reform tools. The key social issues facing humankind today are many, to name a few: social inequality, global warming, economic stagnation, social conflict, rising debt and the threat of unemployment from disruptive technology, as greater uncertainties and volatilities.
