With All Else Failing, Try Rate Hikes to Rescue the Economy - Bloomberg View

With All Else Failing, Try Rate Hikes to Rescue the Economy - Bloomberg View



...One big problem with artificially engineering low borrowing costs is that capital can end up trapped in so-called zombie companies. What the economist Joseph Schumpeter called "creative destruction" is less likely when money is free. That prevents economic Darwinism from weeding out the weak....



...If central banks (and indeed financial markets) are telling the world that money will be free for the foreseeable future, what incentive do consumers or companies have to borrow today to consume or invest, ...