Do lower interest rates really stimulate consumer spending?

2016-06-29T20:16:34Z

What seems to happen is that low wages have caused people to use the low interest environment to either speculate on property or to enter the housing market on large credit. This naturally pushes up the price of property thus ultimately diverting any new money into a property boom instead of into the desired productivity boom.

Dan2016-06-29T20:15:10Z

Favorite Answer

Yes, they do. When it is cheaper to borrow money, people spend more. When putting money in the bank pays less interest, people are more likely to spend.

Anonymous2016-06-29T20:13:40Z

i have no idea. interest rates don't seem to affect my spending.