From The Associated Press:
WASHINGTON (AP) — The world’s key central banks have worked themselves into contortions to try to rev up economic growth, raise inflation and coax consumers and businesses to borrow and spend more.
They’ve pumped trillions into financial systems and driven interest rates about as low as they can go – even below zero in Europe and Japan. Yet after several years, the results are … meh.
As central bankers meet this week at an annual conference in Jackson Hole, Wyoming, the global landscape remains bleak. Growth is sluggish. Inflation barely registers. Businesses won’t invest. And consumers remain mostly hunkered down eight years after a financial crisis that jolted central banks to take radical steps in the first place.
Far from stepping up spending, many people and businesses have instead been saving money despite essentially zero interest. Economists warn that the easy-money policies are losing effectiveness over time – and might even make things worse.
“It’s pushing on a string if you’re trying to get people who are already living in a borderline recession economy, who are already up to their eyeballs in debt, to borrow more,” says Mark Blyth, a professor of international political economy at Brown University.
The central banks’ extraordinary efforts weren’t meant to be permanent. They were designed to restore confidence in a banking system that was teetering in 2008 and then to counter the deepest recession since the 1930s.
By all accounts, they managed to ease panic and rescue the world’s advanced economies. But the United States, and especially Europe and Japan, haven’t been able to ignite borrowing and spending and restore their economies to full health.
The International Monetary Fund foresees sluggish growth in each economy this year: …