What is it about?
This article reviews two competing explanations for the occurrence of unnatural low interest rates. The secular stagnation hypothesis of Keynesian origin and the financial repression doctrine associated with the Austrian School of Economics.
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Why is it important?
Market interest rates have been on a declining trend over the past 35 years in all advanced economies, even reaching negative territory in some European jurisdictions. This article considers whether the decline to ultra-low interest rates is related to economic fundamentals or monetary policy.
Perspectives
My interest in this topic arises from the long-standing controversy about the desirable role for the state in guiding the economy on a higher potential growth path as opposed to relying on the efficiency of market processes in generating prosperity.
Dr. Ad van Riet
United Nations University Institute on Comparative Regional Integration Studies (UNU-CRIS)
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This page is a summary of: Monetary Policy and Unnatural Low Interest Rates: Secular Stagnation or Financial Repression?, Review of Economics, September 2019, De Gruyter,
DOI: 10.1515/roe-2019-0015.
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