Could there be a "Sub-market Interest Rate" in the IS-LM Framework?

This paper attempts to make a case of “sub-market interest rate” using the IS-LM framework. The argument is that when the market interest rate falls below a certain level, the low cost of borrowing would invite speculative varieties or unproductive investment, which could eventually crowd out productive investment. As such, both monetary policy and fiscal policy may not be effective under certain circumstances.

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Year of publication:	2014-05-01
Authors:	Kui-Wai, Li

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Type of publication:	Book / Working Paper
Language:	English
Notes:	Kui-Wai, Li (2014): Could there be a "Sub-market Interest Rate" in the IS-LM Framework? Published in: E-axes No. On Monetary Policy and Banking (1 May 2014)
Classification:	E4 - Money and Interest Rates ; E40 - Money and Interest Rates. General ; E43 - Determination of Interest Rates; Term Structure Interest Rates ; E5 - Monetary Policy, Central Banking and the Supply of Money and Credit ; E52 - Monetary Policy (Targets, Instruments, and Effects)
Source:	BASE

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