A New Perspective On Low Rates – Low Loan Demand! 2

Milton Friedman's Interest Rate Fallacy highlights low rates as evidence that money supply is tight rather than the other way round as commonly believed

Recognizing that loan growth is weak even though rates are at historic lows expands the list of possible causes.

Instead of banks’ simple explanation of demand for loans being low, which is the equivalent of blaming consumers and businesses for not wanting loans, we can see that there are other ways of looking at the situation.

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