this post was submitted on 31 Jul 2025
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Time preferences would be lengthened due to lower interest rates. People would save instead of taking on more debt. It would be harder to get a loan, but your real interest rate would be lower.
Instead of deliberately encouraging consumption, everyone would buy less stuff. This would be terrible for "the economy" (rich people) but great for people who live in the environment.
That makes sense. It sounds like the closer to zero it gets the better. I know deflation is problematic. I wonder how close to zero is achievable. We've seen stable inflatuon of about three percent, plus or minus two for a few years in the past. I wonder if it's possible to achieve two percent, plus or minus one without going under zero.