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I know this is counterintuitive but in order to spur growth, and encourage the right type of risk taking which is how you end up with innovations, I believe you
by bitxbit 6y ago
I know this is counterintuitive but in order to spur growth, and encourage the right type of risk taking which is how you end up with innovations, I believe you need to have interest rates above a certain threshold. Indefinite ZIRP discourages risk taking and encourages financial growth arrangements.
- ivalm 6y agoCan you elaborate on this? ZIRP encourages people to seek riskier investments, which presumably means to spur growth. Low risk financial arrangements are exactly what suffers.
- nicbou 6y agoBased on my limited observation as a layman, it seems to encourage reckless investments in ideas that seemingly don't work. How many more 100 million quid bike rental schemes does the world need?
- ivalm 6y agoBut that’s not people going to “financial arrangements.” ZIRP does encourage over reckless investment in ventures with low chance of working out, I am just saying it’s different.