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A website forum in which senior fellows of the Peterson Institute for International Economics discuss and debate their responses to global economic and financial developments as they occur each day and offer insights that others might overlook.
With short-term, risk-free interest rates essentially at zero in the major developed economies, conventional monetary policy is in a liquidity trap. As a number of commentators have observed, printing zero-interest-rate money to buy zero-interest-rate assets has no real economic effect because the assets are near-perfect substitutes for money. But does that [...]
One of the most striking features of today’s economy is that interest rates, on everything from bank loans to Treasury bonds, are at 50-year lows. Federal Reserve actions to stabilize the financial system and stimulate economic growth contributed importantly to these low rates. There is much talk lately of the need [...]