Yes, lowering interest rates during tough times has the effect of making borrowing capital cheaper, thus incentivizing people to take on risk via opening a busi

Yes, lowering interest rates during tough times has the effect of making borrowing capital cheaper, thus incentivizing people to take on risk via opening a business, investing, etc... In contrast, raising interest rates is a way to fight a hot economic market. While in theory having massive growth might be ideal, it would be the equivalent of a sprinter using all of his/her energy in the first 100m while running a marathon...it needs to be a balancing act. Lowering interest rates has been one of the major tools in fighting recessions, and one of the main concerns has been that lowering interest rates isn't possible(or effective) when they are already at such a low level.