The argument that low interest rates during boom times creates debt bubbles and financial instability is potentially misleading.
Using an argument that has been put forward many times by the Bank for International Settlements (BIS), Claudio Borio, the head of the organisation’s monetary and economic department, along with Piti Disyatat, head of forecasting and macro surveillance at the Bank of Thailand, warn about the dangers of low interest rates in an article at VoxEU. Central banks need to be aware of the cost of low interest rates.
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