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As big firms get bigger, rate cuts doing less to boost biz spending: Report

But it could shape how the Fed and others approach the next recession

Reuters  |  Jackson Hole 

Low-interest rates may do less to boost business spending in today's economy than in years past because the big companies that now dominate many industries tend to use their money on intangibles that do not get cheaper as borrowing costs fall. That is the conclusion of a research paper presented on Friday to global central bankers gathered in Jackson Hole, Wyoming that aims to explain why super-low interest rates put in place in the 2007-2009 financial crisis failed to lift business spending as much as expected, resulting in slower than forecast economic growth. The paper, ...

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First Published: Fri, August 24 2018. 23:34 IST
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