Should We Start Shooting ‘Corporate Zombies’?

Ever since the era of risk free Zero Interest Rate Policy began with the Great Financial Crisis, there have been a number of different arguments which have popped up in the mainstream economic policy debate about “negative side effects” of this policy. Keeping interest rates low for long periods of time sits uncomfortably within mainstream economic theory, given the overwhelming effect interest rates are supposed to have on investment decisions. More fundamentally, there is a clear instinct engendered by much economics education that such an administered government policy should be leading to a harsh misallocation of resources. I documented and criticized one such argument, and in the process laid out reasons to be skeptical towards the influence of interest rates on investment decisions,

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