The paper takes a critical look at the conceptual and empirical underpinnings of prevailing explanations for low real (inflation-adjusted) interest rates over long horizons and finds them incomplete. The role of monetary policy, and its interaction with the financial cycle in particular, deserve...

This paper compares the responses of short-term bank lending rates to policy rates in a sample of 12 industrialised countries and seeks to relate them to characteristics of the financial system and of the policy environment. The degree of competition in the loan market and the clarity of the...