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The problem is near term interest rates are near 0, so the casual pathway of money saved -> lower interest rates -> more investment isn't as effective. This is
by JamesBarney 7y ago
The problem is near term interest rates are near 0, so the casual pathway of money saved -> lower interest rates -> more investment isn't as effective. This is why quantitative easing has so little impact.
And a saved dollar is spent less than a spent dollar.
- abfan1127 7y agolow interest rates are supposed to provide information regarding the value of money spent vs. money saved. However that function isn't allowed to work. Further quantitative easing add(s|ed) further noise to the flow of money from investment to spending.