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Risks To The Economy When Zero Interest Rates Don't End

Thursday, November 8, 2012 - 5:10 AM
The longer zero interest rates drag on, the more risks there will be for the economy. This Economist blog post describes "the problem of zero" and how Congress and the President will have a very difficult task crafting a budget. Excerpts from the blog post:
There is a risk that it will get stuck at the zero lower bound, much as Japan has. That could lead to years of disappointing growth and could be very bad for American finances.
[...]
If fiscal policy is an out-and-out drag, the timeframe for exiting the zero lower bound is likely to stretch out to the next recession and beyond.

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Ken TuminKen Tumin5,441 posts since
Nov 29, 2009
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