Friday, September 27, 2013

Andrea Terzi — The problem with Quantitative Easing…

The problem with Quantitative Easing… was illustrated today by Raghuram Rajan, the Reserve Bank of India governor, along these lines....
The people who saved before the crisis, he said, were largely saving for their retirements. After the crisis they find themselves needing to save more, a problem that is compounded if the central bank pushes down real interest rates and reduces their income further.
In other words, low interest rates have a contractionary effect.
Money And The Real Economy
The problem with Quantitative Easing…
Andrea Terzi | Professor of Economics at Franklin College Switzerland (FCS), and a Research Associate at the Levy Economics Institute of Bard College, NY. He also lectures on Monetary Economics at Catholic University in Milan, Italy.

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