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Mohamed A. El-Erian: Long-Term Consequences Of Negative Rates

TedTed
in Off-Topic
FYI: -- Most economists are tempted to rely on incremental analysis to explain the spread of negative interest rates and their implications for the global economy and markets. This is understandable, yet the inclination to focus primarily on marginal changes could be overly partial and even misleading -- especially for market participants who must navigate the unintended consequences of sub-zero yields, including the possibility of “tipping” events.
Regards,
Ted
http://wealthmanagement.com/print/fixed-income/long-term-consequences-negative-rates

Comments

  • Jarrett
    Rather then go to negative interest rates with the attendant problems, why not "Helicopter Money"? This would boost spending by everybody, which would also serve to increase economic activity.

    The term "helicopter money" was coined by Milton Friedman, and essentially is the central bank dropping money into the accounts of the nation's citizens. Doesn't actually requre any helicopters.
  • Old_JoeOld_Joe
    Actually, the WSJ reports that we currently have an excess of unemployed helicopters at the moment due to cutbacks in fracking oil field production, so we could use those too!
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