Sentences with phrase «keep nominal interest rates»

[10][12] «One of the main goals of financial repression is to keep nominal interest rates lower than they would be in more competitive markets.

Not exact matches

Even if the Bank of Japan did keep real and nominal interest rates low after the country returned to inflation, the old «deflationary equilibrium» would be broken.

On the other hand, a borrower who pays a fixed - rate mortgage of 5 percent would benefit from 5 percent inflation, because the real interest rate (the nominal rate minus the inflation rate) would be zero; servicing this debt would be even easier if inflation were higher, as long as the borrower's income keeps up with inflation.

Keep in mind that the fees you will pay are based on the amount you borrow, but they are nominal in terms of dollars spent, although the interest rate might appear high, on an annual basis.

If the economy is hit by an inflationary supply shock, then it must be met by an increase in the inflation rate and an increase in the nominal interest rate (thus keeping real rates stable) rather than a rate hike to maintain a constant inflation rate (which would simply be an unwarranted transfer of wealth to lenders).