The Association of German banks has released a press statement (in German) which is very interesting. According to a survey, Germans keep their wealth in the form of bank deposits at different maturities even though interest rates are low. This empirical fact invalidates neoclassical theory that says that savers save less when interest rates are low and more when interest rates are high. The typical savings schedule is upward-sloping in an interest rate/savings space. In reality, savings do not seem to depend on the interest rate as the amount of savings (income not spend) has not fallen in the last years when interest rates in the euro area went down to zero.…econoblog 101
Association of German banks: loanable funds theory fails
Dirk Ehnts | Berlin School for Economics and Law
No comments:
Post a Comment