Reasons for the Demise of Interest: Savings Glut and Secular Stagnation or Central Bank Policy?

This article compares the Keynesian, neoclassical and Austrian expla-nations for low interest rates sluggish growth. From a Keynesian perspective, are attributed to aging societies, which save more future (global savings glut). Low growth is linked slowing population declining marginal efficiency of investment as well fixed capital due digitalization (secular stagnation). In contrast, from perspective business cycle theory, were decreased step by central banks stimulate paralyzed lowered in long term. study shows that ability extend credit ex nihilo requirement time produce goods invalidates permanent IS identity assumed theory. Furthermore, it found there no empirical evidence hypotheses global glut secular stagnation. Instead, can be explained emergence quasi “soft budget constraints” result rates, reduce incentive enterprises strive efficiency.