Report
What if the only effect of expansionary monetary policies is to drive up asset prices and public debt?
Expansionary monetary policies (we look at the United States and the euro zone): Have had little impact on corporate investment, because the required return on equity has not fallen in line with interest rates; Have not driven down household savings rates; Have not provided significant support for household housing investment. But: As long-term interest rates are very low relative to growth rates, asset prices have been rising sharply; Thanks to very low interest rates and purchases of public debt by central banks, fiscal policies have been able to be highly expansionary and public debt ratios have been able to rise considerably. If the only effect of expansionary monetary policies is to push up asset prices and public debt ratios excessively, then the effectiveness of these policies is questionable.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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