Low for Long? Causes and Consequences of Persistently Low Interest Rates

Charles Bean, Christian Broda , Takatoshi Ito, Randall Kroszner 23 October 2015



Executive summary

1 Introduction

1.1 Some key facts
1.2 Historical context
1.3 Summary

Chapter 1 Annex: Expected inflation and the UK real consol yield

2 Why have (safe) real interest rates fallen?

2.1 A higher propensity to save
2.2 A lower propensity to invest
2.3 Risky versus safe assets and portfolio shifts
2.4 Summing up

3 Lessons from Japan

3.1 A brief chronology
3.2 From disinflation to deflation
3.3 Escaping the deflationary trap
3.4 Effects of low interest rates on the private sector
3.5 Demography

4 Policies and prospects

4.1 Monetary policy
4.2 Financial markets and financial stability
4.3 Prospects
4.4 Concluding remarks


Professor of Economics, LSE; Associate, Centre for Macroeconomics

Managing Director, Duquesne Capital Management

Professor of International and Public Affairs, Columbia University; Professor, GRIPS; CEPR Research Fellow

Norman R. Bobins Professor of Economics at the Booth School of Business, University of Chicago


CEPR Policy Research