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Living with low for long

Bean, Charles (2016) Living with low for long. The Economic Journal, 126 (592). pp. 507-522. ISSN 0013-0133

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Identification Number: 10.1111/ecoj.12370


I review the causes and some of the consequences of the recent decline in global real interest rates. Causes include: a higher propensity to save associated with a rise in the population share of the high-saving middle-aged; a weaker propensity to invest since the 2007-8 financial crisis; and portfolio shifts towards safer assets. Consequences include: an increased likelihood that policy rates are constrained by the zero lower bound, necessitating greater reliance on unconventional monetary policies; and an increased risk of financial instability as investors seek to generate higher yields.

Item Type: Article
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Additional Information: © 2016 Royal Economic Society
Divisions: Economics
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HG Finance
Sets: Departments > Economics
Date Deposited: 21 Mar 2016 12:01
Last Modified: 20 May 2020 03:24

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