Skip to main content

Monetary policy is losing its power over households

The downward trend in interest rates that began in the 1980s contributed to large falls in household saving rates in most advanced economies. But with larger proportions of people now nearing retirement, some consumers are being forced to respond to low interest returns by saving more. While it is still unlikely that low interest rates are the reason why household saving rates have recently risen, population ageing has arguably weakened the ability of monetary policy to affect saving and therefore consumption.

Become a member to read more

This is premium content that requires an active Capital Economics subscription to view.

Already a member?

You may already have access to this premium content as part of a paid subscription.

Sign in to read the content in full or get details of how you can access it

Register for free

Sign up for a free account to gain:

  • Unlock additional content
  • Register for Capital Economics events
  • Receive email updates and economist-curated newsletters
  • Request a free trial of our services

Get access