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Washington — Monetary policy is supposed to work like this: cut interest rates, and you’ll encourage businesses and households to borrow, invest and spend. It’s not really playing out that way. In the cheap-money era, now into its second decade in most of the developed world (and third in Japan), there’s been plenty of borrowing. But it’s been governments doing it. The numbers help explain a growing sense that central banks, which took emergency action to pull economies out of the 2008 slump, may not be able to repeat the trick in another downturn. They’re even facing broader questions about their independence from politics, a cornerstone of economic management in rich countries. In the past decade, still-indebted private actors were mostly unwilling to dive back into the red, even at ultra-low rates engineered by the central banks — while governments could and did. The dividing line is starting to look fuzzy. ‘Fat tail’ Some analysts say it’s time to redraw it. The arms-length rela...

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