Did the low interest rates encourage growth

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Box 11-1 investigates the case of the liquidity trap in Japan, showing that interest rates have been virtually zero repeatedly in the late 1990s. Did these low interest rates manage to stimulate economic growth rates? Go to www.stat.go.jp/english . Click on "Statistics" and scroll down to "Japan Statistical Yearbook." Click on "National Accounts" and download 3-1B [Gross Domestic Product (Expenditure Approach) in Real Terms (Chain-linked Method)]. In EXCEL, transform the series to show percentage change from last year. [i.e., replace 1995 RGDP with change from last year: (1995 RGDP-1994 RGDP)/1994 RGDP.] Graph this series for the period since 1995. Compare the graph you obtained with Figure 1 in Box 11-1. Did the low interest rates encourage growth?

Reference no: EM131136498

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