, Columnist
A Zombie Economy Could Be America’s Future
Not a good metaphor for an economy.
Photographer: Noam Galai/Getty Images North AmericaOver the next decade, the US economy will face two big challenges: higher interest rates and AI-generated disruption. Each invites the same solution: policies to keep rates below their market level.
The strategy, also known as yield-curve control, is tempting, and it may even provide an immediate boost to the economy. But messing with rates would be a mistake. Japan’s experience shows that that the long-term costs of keeping rates artificially low far outweigh the short-term benefits.