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Economy

Carmen M. Reinhart: Are negative real interest rates the 'new normal'?

Some questions can only be answered by examining the broad sweep of history. Over the past 150 years, "world" real interest rates have ventured into negative territory (yielding less than the rate of inflation) on a sustained basis on only four occasions, including the present cycle starting with the global financial crisis of 2008. Those negative real interest rates tax bondholders and effect a transfer from savers to borrowers.

Past examples

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