Three mistaken beliefs that led to the Foundation of a theory which held together with all the central bankers since the late 20th century, there were three. Download the first version that brings interest always fueled growth. It sounds trivial and surprisingly logical: the interest rate drops, businesses are taking credit, they increase business activity, growth, debt is returned, and the economy. There is only one problem with this rational belief has no basis in reality. Specifically, actual reality. In the long term the interest and credit growth it brings, are hurting growth, and vice versa. And it sounds contrary to intuition, the facts over more than 50 years are inconclusive (see chart)-the weakest growth in a decade which was zero interest rate environment, and growth was high in decades which was around 5% interest rate. For example, interest rates on bonds of the Government of the United States for 10 years, which is the base interest rate throughout the economy, particularly in the corporate sector and the real sector, moving in the 1960s between 4% and 6%, and 6% on growth. In the 1990s, interest rates stood at about 6% and 4.5% growth of approximately. In contrast, the lowest growth in the past 60 years, approximately 1.8%, in the last decade, when the interest rate was low, and the position of approximately 1.5% to government bonds for 10 years. Also debt ratio analysis-low interest result, GDP-growth rate result gives similar results. Apparently, according to popular belief, the increase in debt should produce an increase in growth, not her. As higher debt, so it creates less new product and nothing more. As you can see from the attached graph, as the debt grows, the gap between the GDP growth, not decline. Simply put, low interest rates are encouraging increase in debt, but Lo and behold-an increase in debt leads to less growth in GDP, and vice versa.


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