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How does inflation affect the economy when interest rates are near zero?

Dixon, Huw ORCID: https://orcid.org/0000-0002-9875-8965 2022. How does inflation affect the economy when interest rates are near zero? [Online]. Economics Observatory: Economics Observatory. Available at: https://www.economicsobservatory.com/how-does-infl...

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Abstract

When central banks are keeping policy interest rates near to zero, inflation has a big impact on the economy, notably by making real interest rates negative. This redistributes from savers to borrowers – and since the government is the largest borrower, there is a substantial ‘inflation tax’.

Item Type: Website Content
Date Type: Published Online
Status: Published
Schools: Business (Including Economics)
Subjects: H Social Sciences > HA Statistics
H Social Sciences > HJ Public Finance
Publisher: Economics Observatory
Date of First Compliant Deposit: 25 November 2022
Last Modified: 04 Feb 2025 10:54
URI: https://orca.cardiff.ac.uk/id/eprint/154468

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