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In brief: high foreign real interest rates and investment in the 1990s


  • C.L. Osler


This article argues that high interest rates abroad have substantially depressed private investment in most foreign members of the Group of Seven during the 1990s. Business investment has been especially hard hit and housing construction disrupted, although the effect on housing has been offset in some countries by stimulative fiscal policies. The author estimates that overall, high interest rates have reduced output in the foreign G-7 by 2 1/2 to 4 1/4 percent per year on average over 1990-93.

Suggested Citation

  • C.L. Osler, 1994. "In brief: high foreign real interest rates and investment in the 1990s," Quarterly Review, Federal Reserve Bank of New York, issue Spr, pages 38-44.
  • Handle: RePEc:fip:fednqr:y:1994:i:spr:p:38-44:n:v.19no.1

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    References listed on IDEAS

    1. Roger S. Smith, 1990. "Factors Affecting Saving, Policy Tools, and Tax Reform: A Review," IMF Staff Papers, Palgrave Macmillan, vol. 37(1), pages 1-70, March.
    2. Steven F. Venti & David A. Wise, 1990. "Have IRAs Increased U. S. Saving?: Evidence from Consumer Expenditure Surveys," The Quarterly Journal of Economics, Oxford University Press, vol. 105(3), pages 661-698.
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