caa a22 4500 606237259 CHVBK 20210128101252.0 cr unu---uuuuu 210128e20151101xx s 000 0 eng 10.1007/s10272-015-0559-6 doi (NATIONALLICENCE)springer-10.1007/s10272-015-0559-6 When Low Interest Rates Cause Low Inflation [Elektronische Daten] [Markus Demary, Michael Hüther] A new theory of interest rates, the Neo-Fisherian theory, predicts a low inflation rate due to a central bank's low interest rate. After several years of near-zero interest rate policies and low and even negative inflation rates in the eurozone and in the US, this theory gained momentum in academic circles. Indeed, central banks have had a hard time reaching their inflation targets. This paper argues that it is not the low central bank policy rate which causes low inflation but rather the low equilibrium real interest rate, the economy's real interest rate under full employment and stable prices, in combination with the zero lower bound on nominal interest rates, which restricts the effectiveness of monetary policy and causes low inflation. In order to stabilise inflation in the medium term, higher equilibrium real interest rates are necessary. Since monetary policy cannot move the equilibrium real interest rate, structural policies are needed. ZBW and Springer-Verlag Berlin Heidelberg, 2015 Demary Markus Cologne Institute for Economic Research, Konrad-Adenauer-Ufer 21, 50668, Köln, Deutschland aut Hüther Michael Cologne Institute for Economic Research, Konrad-Adenauer-Ufer 21, 50668, Köln, Deutschland aut Intereconomics Springer Berlin Heidelberg 50/6(2015-11-01), 350-355 0020-5346 50:6<350 2015 50 10272 https://doi.org/10.1007/s10272-015-0559-6 text/html Onlinezugriff via DOI BK010053 XK010053 XK010000 Metadata rights reserved Springer special CC-BY-NC licence nationallicence 1 research-article jats NATIONALLICENCE NATIONALLICENCE NL-springer NATIONALLICENCE 856 40 https://doi.org/10.1007/s10272-015-0559-6 text/html Onlinezugriff via DOI NATIONALLICENCE 700 1- Demary Markus Cologne Institute for Economic Research, Konrad-Adenauer-Ufer 21, 50668, Köln, Deutschland aut NATIONALLICENCE 700 1- Hüther Michael Cologne Institute for Economic Research, Konrad-Adenauer-Ufer 21, 50668, Köln, Deutschland aut NATIONALLICENCE 773 0- Intereconomics Springer Berlin Heidelberg 50/6(2015-11-01), 350-355 0020-5346 50:6<350 2015 50 10272