The most salient feature of the landscape facing monetary policy today is the low level of nominal and real yields everywhere. Among the G7, three countries currently have negative yielding 5-year bonds – Germany, France and Japan – representing 14% of world GDP. And that proportion rises to 22% if we include bonds yielding less than 1%. Some observers see this as an artificial state generated by the policies of central banks – and argue that it threatens not only economic and financial stability, but social equity too. So what I would like to discuss in my remarks today is why interest rates are so low, and what the ... (full story)