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Could Ultra-Low Interest Rates Be Contractionary?

• jhayward 7y ago
  > extremely low rates may lead to slower growth by increasing market concentration and thus weakening firms' incentive to boost productivity At the very least, low rates have shifted all of the income growth from labor to capital. Since capital assets can be purchased with "cheap" or "free" money (i.e., don't have to produce as much revenue to repay their cost), capital can be used to supplant labor in more cases.