What happens if interest rates go to zero? – Face to Face with Bernard Hickey

Gareth MorganEconomics2 Comments

Finance Minister Bill English attended meetings at the International Monetary Fund (IMF) and World Bank next week, and returned reaffirming the Government’s commitment to reducing public debt under 20% of GDP. He thinks that is the most prudent strategy in these uncertain economic times.

Meanwhile the rest of the world is struggling with stagnant growth despite years of record low interest rates. In some countries interest rates are now even negative. Overseas Governments are starting to ask what action they can take in a zero interest rate world, and the IMF is advising them to spend more.

In this Face to Face Geoff talks with Bernard Hickey about these issues and what options New Zealand has to stimulate the economy as interest rates edge towards zero.

What happens if interest rates go to zero? – Face to Face with Bernard Hickey was last modified: October 11th, 2016 by Gareth Morgan
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Gareth Morgan

Gareth Morgan

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Gareth Morgan is a New Zealand economist and commentator on public policy who in previous lives has been in business as an economic consultant, funds manager, and professional company director. He is also a motorcycle adventurer and philanthropist. Gareth and his wife Joanne have a charitable foundation, the Morgan Foundation, which has three main stands of philanthropic endeavour – public interest research, conservation and social investment.

  • mark

    The OCR cuts are not being passed on by banks now. Interest rates are going up OCR is said to being cut again so isn’t the RB already a lame duck?

    I think you are right about govt spending. I feel at the moment govt spending is low given the increase in immigration numbers. I feel that they are getting the books as good as possible for election year bribes.

  • ross b

    We have certainly NOT been here before Bernard. The 1930’s had world population less than a third of now, and huge untapped natural resources. This is no longer the case.

    Economists seem to be under the impression resources, like money, just grows on trees. But the key one, cheap Oil has gone. NZ’s fiscal position is irrelevant, the financial system is in big trouble.