BoE’s Vlieghe: financial sector may have pushed rates down
MPC member suggests end of gold standard seems to have lent negative skew to growth
The growing importance of the financial sector may be an important factor in why equilibrium interest rates have been so low, the Bank of England’s Gertjan Vlieghe said in a speech today (September 15).
Vlieghe presented evidence that the riskiness of the economy is an important factor that pushes down on interest rates. Since the end of the gold standard, the financial sector has become dominant, and he suggested this may have led to negative skewness and fatter tails in the distribution of
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