Posted by & filed under Economic Analysis, Governments & Regulators.

Description: Thomas Hoenig, head of the Kansas City Federal Reserve Bank says 0% interest rates lead to inflation and economic imbalances, with an unclear long-term impact.

Source: CNNMoney.com – video report

Date: 06/01/2011

Link: http://money.cnn.com/video/news/2011/06/01/n_ss_hoenig_gps.cnnmoney/

Questions for discussion:

  • Do you agree with the economic arguments made by Mr Hoenig?
  • What are the consequences for businesses and consumers of continuing to keep interest rates too low?
  • What would your advice be to regulatory authorities?

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