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:	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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