Macro: After negative rates, what’s next?

Negative interest rates are a sign of panic on the part of policy makers. It’s time they made use of an out-of-favour tool, argues John Addis.

In the end, Ben Bernanke got it right. Bailing out the banks and many years of unconventional monetary policy saved the global economy from depression. However, the recovery has been weak. For example, in the United States – which has emerged more strongly from the great recession than elsewhere –​ economic growth has averaged just 2.2% a year in the six years since the Global Finance Crisis. In Europe, the figure is far more feeble.

Cheap money has saved the world from depression

However, it has failed to promote a meaningful recovery

Governments need to borrow and spend more

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