Greenspan: Negative Rates Warp Investment Behavior

The video discusses the economic implications of negative interest rates, highlighting how they distort investment patterns and affect corporate behavior. It raises concerns about productivity and the challenges of government policies aimed at boosting investment. The discussion suggests that low interest rates lead to misallocation of capital and economic uncertainty.

What is a potential consequence of people accepting negative interest rates?

• Higher inflation

• Distorted investment patterns

• Economic stability

• Increased savings

How do low interest rates affect corporate investment behavior?

• They encourage short-term investments

• They lead to distorted market signals

• They stabilize earnings ratios

• They reduce capital misuse

What is a major concern regarding the current state of productivity?

• Excessive government intervention

• Uncertainty about future economic conditions

• High levels of real capital investment

• Stable output per hour

What is the relationship between real capital investment and productivity?

• Productivity is driven by real capital investment

• Real capital investment has no impact on productivity

• Productivity decreases with increased real capital investment

• Higher real capital investment leads to lower productivity

What is a potential downside of government policies aimed at spurring investment?

• They reduce market distortions

• They always lead to increased productivity

• They guarantee economic stability

• They can result in unintended negative outcomes