Advanced Search
MyIDEAS: Login

Impact of a Low Interest Rate Environment - Global Liquidity Spillovers and the Search-for-yield

Contents:

Author Info

  • Ansgar Belke

    ()

Abstract

On 10 January 2013 the ECB Governing Council decided “to keep the key ECB interest rates unchanged” based on an assessment of a ‚contained‘ inflationary pressure and a weak economic activity, a contraction of real GDP in second and third quarter of 2012. Similar decisions have been taken by other leading central banks around the globe. This paper assesses and comments on several aspects of the implied low interest rate environment. It contains some general considerations with respect to the current low interest rate environment in advanced economies. It then deals with potential conflicts between monetary policy and financial stability in a low interest rate environment. Moreover, more practical implications for the necessity of supervision of pension funds and the insurance sector are derived. The paper also assesses the investment opportunities for retail investors in such an environment. Finally, we single out examples of main beneficiaries and losers from a low interest rate environment.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://repec.rwi-essen.de/files/REP_13_429.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen in its series Ruhr Economic Papers with number 0429.

as in new window
Length: 21 pages
Date of creation: Jul 2013
Date of revision:
Handle: RePEc:rwi:repape:0429

Contact details of provider:
Postal: Hohenzollernstraße 1-3, 45128 Essen
Phone: (0201)8149-0
Fax: (0201)8149-200
Email:
Web page: http://www.rwi-essen.de/
More information through EDIRC

Order Information:
Web: http://www.rwi-essen.de/publikationen/

Related research

Keywords: Global liquidity; central banks and their policies; financial repression; low interest rates; insurance companies; pension funds;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Ansgar Belke & Ingo G. Bordon & Torben W. Hendricks, 2009. "Global Liquidity and Commodity Prices – A Cointegrated VAR Approach for OECD Countries," Ruhr Economic Papers 0102, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  2. Ansgar Belke & Bernhard Herz & Lukas Vogel, 2007. "Reforms, Exchange Rates and Monetary Commitment: A Panel Analysis for OECD Countries," Open Economies Review, Springer, vol. 18(3), pages 369-388, July.
  3. Belke, Ansgar & Bordon, Ingo G. & Volz, Ulrich, 2013. "Effects of Global Liquidity on Commodity and Food Prices," World Development, Elsevier, vol. 44(C), pages 31-43.
  4. Ansgar Belke & Christian Dreger & Richard Ochmann, 2012. "Do Wealthier Households Save More? The Impact of the Demographic Factor," ROME Working Papers 201203, ROME Network.
  5. repec:ecb:ecbwps:20111427 is not listed on IDEAS
  6. Anke Kablau & Michael Wedow, 2012. "Gauging the Impact of a Low Interest Rate Environment on German Life Insurers," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 58(4), pages 279-298.
  7. Ansgar Belke & Andreas Freytag & Johannes Keil & Friedrich Schneider, 2012. "The Credibility of Monetary Policy Announcements - Empirical Evidence for OECD Countries since the 1960s," Global Financial Markets Working Paper Series 2012-34, Friedrich-Schiller-University Jena.
  8. Ansgar Belke & Daniel Gros, 2001. "Real Impacts of Intra-European Exchange Rate Variability: A Case for EMU?," Open Economies Review, Springer, vol. 12(3), pages 231-264, July.
  9. Pablo Antolin & Sebastian Schich & Juan Yermo, 2011. "The Economic Impact of Protracted Low Interest Rates on Pension Funds and Insurance Companies," OECD Journal: Financial Market Trends, OECD Publishing, vol. 2011(1), pages 237-256.
  10. Maddaloni, Angela & Peydró, José-Luis, 2010. "Bank risk-taking, securitization, supervision and low interest rates: Evidence from the euro area and the U.S. lending standards," Working Paper Series 1248, European Central Bank.
  11. Jeffrey Fuhrer & Brian Madigan, 1994. "Monetary policy when interest rates are bounded at zero," Working Papers 94-1, Federal Reserve Bank of Boston.
  12. Ugo Albertazzi & Leonardo Gambacorta, 2006. "Bank profitability and the business cycle," Temi di discussione (Economic working papers) 601, Bank of Italy, Economic Research and International Relations Area.
  13. Burda, Michael & Wyplosz, Charles, 2012. "Macroeconomics: A European Text," OUP Catalogue, Oxford University Press, edition 6, number 9780199608645.
  14. Peter Stella, 2010. "Minimising monetary policy," BIS Working Papers 330, Bank for International Settlements.
  15. repec:fip:fedgsq:y:2002:i:nov21 is not listed on IDEAS
  16. Ben S. Bernanke, 2002. "Deflation: making sure "it" doesn't happen here," Speech 530, Board of Governors of the Federal Reserve System (U.S.).
  17. Ansgar Belke & Thorsten Polleit, 2010. "How much fiscal backing must the ECB have? The euro area is not (yet) the Philippines," Economie Internationale, CEPII research center, issue 124.
  18. Claudio Borio, 2011. "Central banking post-crisis: What compass for uncharted waters?," BIS Working Papers 353, Bank for International Settlements.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:rwi:repape:0429. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sabine Weiler).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.