Current:Home > InvestThe life and possible death of low interest rates-DB Wealth Institute B2 Expert Reviews
The life and possible death of low interest rates
View Date:2024-12-23 16:27:19
Right now, the economy is running hot. Inflation is high, and central banks are pushing up interest rates to fight it. But before the pandemic, economies around the world were stuck in a different rut: low inflation, low interest rates, low growth.
In 2013, Larry Summers unearthed an old term from the Great Depression to explain why the economy was in this rut: secular stagnation. The theory resonated with Olivier Blanchard, another leading scholar, because he had made similar observations himself. Larry and Olivier would go on to build a case for why secular stagnation was a defining theory of the economy and why government policies needed to respond to it. They helped reshape many people's understanding of the economy, and suggested that this period of slow growth and low interest rates was here to stay for a long time.
But today, Larry and Olivier are no longer the duo they used to be. As inflation has spiked worldwide, interest rates have followed suit. Earlier this year, Larry announced that he was no longer on the secular stagnation train. Olivier, meanwhile, believes we're just going through a minor blip and will return to a period of low interest rates within the near future. He doesn't see the deep forces that led to a long-run decline in interest rates as just vanishing. Who's right? The future of the global economy could depend on the answer.
This show was produced by Willa Rubin with help from Emma Peaslee, engineered by Maggie Luthar, fact-checked by Sierra Juarez and edited by Jess Jiang.
Music: "West Green Road 2," "Meet Me In The Lobby" and "The Sky Was Orange."
Help support Planet Money by subscribing to Planet Money+ in Apple Podcasts or at plus.npr.org/planetmoney.
Always free at these links: Apple Podcasts, Spotify, Google Podcasts, NPR One or anywhere you get podcasts.
Find more Planet Money: Twitter / Facebook / Instagram / TikTok our weekly Newsletter.
veryGood! (3151)
Related
- Firefighters make progress, but Southern California wildfire rages on
- Fire chief in Texas city hit hard by wildfires dies while fighting a structure blaze
- These Stylish Pieces Are Perfect for Transitioning Your Closet From Winter to Spring & They're on Sale
- Bruce Springsteen & the E Street Band, Noah Kahan to headline Sea.Hear.Now festival
- Jelly Roll goes to jail (for the best reason) ahead of Indianapolis concert
- Ammo supplier at Rust shooting trial says he provided dummy rounds to movie, but handled live rounds for TV show
- Lance Bass says new NSYNC song on Justin Timberlake's upcoming album made his mom cry
- Another inmate found dead at troubled Wisconsin prison
- Taylor Swift gifts 7-year-old '22' hat after promising to meet her when she was a baby
- Liberty University will pay $14 million fine for student safety violations
Ranking
- About Charles Hanover
- EAGLEEYE COIN: Privacy Coin: A Digital Currency to Protect Personal Privacy
- Camila Cabello Reveals the Real Reason Why She Left Fifth Harmony
- Caitlin Clark's record-breaking performance vs. Ohio State sets viewership record for FOX
- Advocacy group sues Tennessee over racial requirements for medical boards
- Sister Wives' Meri Brown Speaks Out on Death of Kody and Janelle’s Son Garrison at 25
- Shania Twain's iconic 'Man! I Feel Like a Woman!' look becomes a Barbie
- More tears flow during Kelce brothers' latest 'New Heights' episode after Jason's retirement
Recommendation
-
Megan Fox Is Pregnant, Expecting Baby With Machine Gun Kelly
-
Commercial air tours over New Mexico’s Bandelier National Monument will soon be prohibited
-
Going into Super Tuesday, Nikki Haley's support boosted by her appeal to independents, women
-
Bitcoin hit a new record high Tuesday. Why is cryptocurrency going up? We explain.
-
Tom Brady Shares How He's Preparing for Son Jack to Be a Stud
-
Texas fire chief who spent 9 days fighting historic wildfires dies responding to early morning structure fire
-
Facebook and Instagram restored after users report widespread outages
-
2 women killed, man injured in shooting at Vegas convenience store; suspect flees on bicycle
Like
- Subway rider who helped restrain man in NYC chokehold death says he wanted ex-Marine to ‘let go’
- Ammo supplier at Rust shooting trial says he provided dummy rounds to movie, but handled live rounds for TV show
- One of the world's most populated cities is nearly out of water as many go days if not weeks without it