Zero interest rates: Is it a rise in interest rates or the zero interest rates themselves that are the risk?

Centr al banks in OECD countries have chosen to implement very low, or zero in the euro zone and Japan, short- and long-term interest rates. So what is the main danger? One immediately thinks of the danger of a rise in interest rates, given the very high levels of debt that have been accumulated at very low interest rates. But for interest rates to rise, inflation would have to rise, which would require some countries to take the risk of restoring wage earners’ bargaining power in the labour market, driving up labour costs and eroding competitiveness. Central banks would then have to accept the risk of a debt crisis that would result from them raising interest rates. So the attention should focus more on the risks associated with keeping interest rates very low: weakening of banks, proliferation of zombie firms, asset price bubbles, capital outflows .