Many influential interests and opinion formers detest today’s ultra-low interest rates. They are also clear who is to blame: central banks. UK Prime Minister Theresa May has joined the fray, arguing that while monetary policy provided the "necessary emergency medicine after the financial crash, we have to acknowledge there have been some bad side effects. People with assets have got richer. People without them have suffered. People with mortgages have found their debts cheaper. People with savings have found themselves poorer. A change has got to come." So, how might the government deliver such change? The answer is not obvious. As Bank of England deputy governor Ben Broadbent notes, real long-term interest rates have fallen to zero (or below) in the past quarter of a century. Furthermore, as the IMF points out, core consumer price inflation has been persistently weak in high-income economies. Broadbent argues: "With inflation relatively stable in all these countries, it’s hard to b...
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