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Why Is Kenneth Rogoff Puzzled by Low Interest Rates?
by Dirk Ehnts, Econoblog101
In an article published at Project Syndicate, Harvard professor Kenneth Rogoff writes about the long mystery of low interest rates. Here is the main issue:
A lot has changed since 2005. We had the financial crisis, and some of the factors cited by Bernanke have substantially reversed. For example, Asian investment is booming again, led by China. And yet global interest rates are even lower now than they were then. Why?
[...] One view holds that long-term growth risks have been on the rise, raising the premium on assets that are perceived to be relatively safe, and raising precautionary saving in general. (Of course, no one should think that any government bonds are completely safe, particularly from inflation and financial repression.)
2013-04-13 09:16:55
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