Invest in alarm clocks
-
Draghi: Addressing the causes of low interest rates
The mandate of each central bank is phrased in strictly domestic terms. But in an open and integrated international economy, the challenges we face are often fairly similar across jurisdictions. Over the past few years, one particular challenge has arisen across a large part of the world. That is the extremely low level of nominal interest rates. Today, 18% of the global economy, weighted by GDP, operates in an environment of negative central bank policy rates, and the proportion rises to 40% if we include countries with zero to 1% rates. Very low rates are not innocuous. They put pressure on the business model of ... (full story)