Economics, Econometrics and Finance
4 years ago

Rising Debt Leads to Lower Wages and Profits, Driving Interest Rates Down

1 view
Jena Economic Research Papers
Low Long-Term Interest Rates - An alternative View
Stefan Behrendt

Paper Summary

The fall in interest rates since the 1980s is not just due to demand, but also because interest can only be paid from added value. With higher debt levels today, less added value is available for interest payments, leading to lower income for workers and entrepreneurs. This results in a decrease in average interest rates over time.

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