Frenkel: Negative Rates Not Healthy for Financial System

The transcript discusses the implications of negative and low interest rates on the financial system, emphasizing that while monetary policy has been crucial in averting a deep recession, it should not be the sole tool for economic growth. The need for fiscal and structural policies is highlighted, along with the evolving mandates of central banks to include financial stability. The discussion also touches on the potential risks of zero interest rates, such as creating economic bubbles.

What role does fiscal policy play in conjunction with monetary policy?

In what ways can low interest rates create disconnections between the real economy and the financial economy?