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Do lower interest rates really stimulate consumer spending?
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.
2 Answers
- DanLv 75 years agoFavorite 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.
- Anonymous5 years ago
i have no idea. interest rates don't seem to affect my spending.
