How Low Interest Rates Change the World
Global Trends Caused by Low Rates and Emerging Factors Shaping the Future of Rates
How Low Interest Rates Change the World invites readers on an engaging exploration of the evolution of interest rates and their impact on the economy.
The book contends that the steady decline in interest rates around the world over the four decades from 1980 to 2020 played a pivotal role in shaping five global trends during the same period: soaring debt levels, escalating housing prices, surging stock markets, widening economic inequality, and increased financial risk-taking.
The Covid-19 pandemic-induced rise in inflation and interest rates disrupted this long-standing downward trajectory of interest rates. Does this shift in interest rate dynamics mark the dawn of a new era characterized by higher rates, or was it merely a temporary blip?
The book argues that six key trends will determine the future path of interest rates—four of which are likely to maintain low rates, while two may drive them higher. Ultimately, the book provides its perspective on the combined impact of these trends and offers a scenario for the future evolution of interest rates and their impact.
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Table of Contents
See Oxford Academic for detailed description with abstracts of chapters etc.
Introduction
Part I. Falling Rates
1: The Level of Interest Rates: Today and Historically
2: Inflation and Real Interest Rates
Part II. Consequences of Falling and Low Interest Rates
3: Debt and Low Interest Rates
4: House Prices and Low Interest Rates
5: Stock Markets and Low Interest Rates
6: Inequality and Low Interest Rates
7: Financial Risk-Taking and Low Interest Rates
Part III. What Caused a Four-Decade Fall in Interest Rates?
8: What Caused a Four-Decade Fall in Inflation?
9: What Caused a Four-Decade Fall in Real Interest Rates?
10: What Caused the Rise in Inflation and Interest Rates after the Covid-19 Pandemic?
Part IV. What Does the Future Hold?
11: Trends That Could Keep Rates Low
12: Trends That Could Elevate Rates
13: Putting It All Together: What Is the Outlook for Rates?
14: Debt, Inequality, and House and Stock Prices Considering Interest Rate Scenarios
References
Index