Low interest rates are the scourge of the poor and vulnerable
By Karen Petrou
When central banks allow interest rates to approach, or fall below, what is quaintly termed “the zero lower bound” there are clear losers. Banks are presuming that households, obedient to monetary policy theory, will borrow more money at still lower rates. In fact, the reality is that “lower for longer” prevents a robust recovery because it makes economic inequality worse.