Larry Summers’ Interest Rate Conundrum
CEPS High-Level Briefs
8 Pages Posted: 21 Jan 2014
Date Written: January 16, 2014
Larry Summers has attracted much attention recently for invoking old theories of secular stagnation to explain the persistence of low interest rates in the recent past. The German economist Carl Christian von Weizsäcker has pointed to a retirement savings glut as the cause for low rates. In the view of Thomas Mayer, however, as expressed in this High-Level Brief, these theses lack both theoretical and empirical support and he offers as an alternative explanation the fall-out from the recent credit boom-bust cycle.
Keywords: Larry Summers, stagnation, retirement savings, interest rates, credit
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