https:\/\/soundcloud.com\/user-653135353\/10-17-16-economic-perspective-why-are-interest-rates-continuing-to-be-low<\/a><\/p>\n

Dee Shore:<\/b><\/p>\n

\u201cToday\u2019s program asks why interest rates are continuing to be low. Mike, interest rates continue to be at almost historic lows. This has reduced the cost of taking out home loans, vehicle loans and other business and consumer loans. What\u2019s behind these super low rates?\u201d<\/span><\/p>\n

Mike Walden:<\/b><\/p>\n

\u201cWell, as usual, there\u2019s a big debate by economists over this, but I think there are many possible reasons. The big one is the aging of the population. We\u2019re becoming an older society, and analysis shows that when you age you don\u2019t buy as many big ticket items. You\u2019re not going after loans, and so that reduces loan demand and reduces pressure on interest rates.\u201d<\/span><\/p>\n

\u201cAnother big one is the internationalization of the economy. Savings can now move around from all countries, from country to country. Of course as China has come into the world economy they\u2019ve generated a lot of savings. Again, that would put pressure down on interest rates.\u201d<\/span><\/p>\n

\u201cAnother big reason, income inequality as a larger share of total income is going to the rich. We know the rich save more, they don\u2019t buy as much per dollar of income so that also would pressure down on interest rates.\u201d<\/span><\/p>\n

\u201cAnd then lastly, I think simply fear. A lot of people are still fearful about the economy. They\u2019ve not really got over the Great Recession, and if you\u2019re fearful you\u2019re not going to go into debt, you\u2019re not going to borrow money. Again, that would reduce loan demand and put down the pressure on interest rates. So a lot of factors here behind these historic low interest rates.\u201d<\/span><\/p>\n

This post was originally published<\/a> in College of Agriculture and Life Sciences News.<\/em><\/p>","protected":false,"raw":"[embed]https:\/\/soundcloud.com\/user-653135353\/10-17-16-economic-perspective-why-are-interest-rates-continuing-to-be-low[\/embed]\r\n

Dee Shore:<\/b><\/p>\r\n\u201cToday\u2019s program asks why interest rates are continuing to be low. Mike, interest rates continue to be at almost historic lows. This has reduced the cost of taking out home loans, vehicle loans and other business and consumer loans. What\u2019s behind these super low rates?\u201d<\/span>\r\n

Mike Walden:<\/b><\/p>\r\n\u201cWell, as usual, there\u2019s a big debate by economists over this, but I think there are many possible reasons. The big one is the aging of the population. We\u2019re becoming an older society, and analysis shows that when you age you don\u2019t buy as many big ticket items. You\u2019re not going after loans, and so that reduces loan demand and reduces pressure on interest rates.\u201d<\/span>\r\n\r\n\u201cAnother big one is the internationalization of the economy. Savings can now move around from all countries, from country to country. Of course as China has come into the world economy they\u2019ve generated a lot of savings. Again, that would put pressure down on interest rates.\u201d<\/span>\r\n\r\n\u201cAnother big reason, income inequality as a larger share of total income is going to the rich. We know the rich save more, they don\u2019t buy as much per dollar of income so that also would pressure down on interest rates.\u201d<\/span>\r\n\r\n\u201cAnd then lastly, I think simply fear. A lot of people are still fearful about the economy. They\u2019ve not really got over the Great Recession, and if you\u2019re fearful you\u2019re not going to go into debt, you\u2019re not going to borrow money. Again, that would reduce loan demand and put down the pressure on interest rates. So a lot of factors here behind these historic low interest rates.\u201d<\/span>"},"excerpt":{"rendered":"

Interest rates have continued to be at a historic low recently. What factors could be playing into this? NC State University economist Mike Walden looks at the potential reasons.<\/p>\n","protected":false},"author":36,"featured_media":1332,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"source":"ncstate_wire","ncst_custom_author":"","ncst_show_custom_author":false,"ncst_dynamicHeaderBlockName":"","ncst_dynamicHeaderData":"","ncst_content_audit_freq":"","ncst_content_audit_date":"","footnotes":"","_links_to":"","_links_to_target":""},"categories":[1],"tags":[],"class_list":["post-1330","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-nc-state"],"displayCategory":null,"acf":[],"_links":{"self":[{"href":"https:\/\/cals.ncsu.edu\/horticultural-science\/wp-json\/wp\/v2\/posts\/1330","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cals.ncsu.edu\/horticultural-science\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cals.ncsu.edu\/horticultural-science\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cals.ncsu.edu\/horticultural-science\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/cals.ncsu.edu\/horticultural-science\/wp-json\/wp\/v2\/comments?post=1330"}],"version-history":[{"count":2,"href":"https:\/\/cals.ncsu.edu\/horticultural-science\/wp-json\/wp\/v2\/posts\/1330\/revisions"}],"predecessor-version":[{"id":15155,"href":"https:\/\/cals.ncsu.edu\/horticultural-science\/wp-json\/wp\/v2\/posts\/1330\/revisions\/15155"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cals.ncsu.edu\/horticultural-science\/wp-json\/wp\/v2\/media\/1332"}],"wp:attachment":[{"href":"https:\/\/cals.ncsu.edu\/horticultural-science\/wp-json\/wp\/v2\/media?parent=1330"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cals.ncsu.edu\/horticultural-science\/wp-json\/wp\/v2\/categories?post=1330"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cals.ncsu.edu\/horticultural-science\/wp-json\/wp\/v2\/tags?post=1330"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}