The low interest rates in the euro zone seem to have many negative effects but little macroeconomic impact

Very low interest rates are expected to reduce savings and increase investment, and therefore eliminate a possible excess savings over investment. This has not happened in the euro zone, by contrast there have been powerful redistributive effects of the low interest rates, as the interest paid by borrowers and the interest received by lenders have fallen . This redistribution has enabled an improvement in borrower solvency, but has therefore not led to a significant change in the savings-investment equilibrium, which we could normally have expect ed : it is borrowers that invest, and lenders’ propensity to save is normally higher than that of borrowers.