We are not convinced that negative policy rates will prompt households to save more, in aggregate, even though some may step up their savings for retirement. There are many other drivers of savings rates, and lower interest rates will tend to boost household and corporate borrowing. Looked at in the round, negative policy rates will probably have a modest but positive effect on demand.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services