How do you stimulate investment? Well, both sides agree that tax cuts to business will do it, but if your government is broke, you cannot use fiscal policy. To avoid the nastiness of deficits, you can just use Monetary policy: lower interest rates to stimulate investment. But the Fed has now been running rates at just about zero for well over half a decade; Japan has been doing it for over two decades. There’s still virtually no investment, rotten growth, few jobs created, and relative stagnation. It doesn’t work.
Lower interest rate doesnt stimulate investment
