In this article, in the FT, Sarah O’Connor argues that the impact of high interest rates is less effective at demand suppression than has historically been the case. The exclusion of the young from the housing market and the impact of older people having finished paying off their mortgages has led to reduction in the number of households with mortgages, from 40% to 30%. It interests me, that the author argues the purpose of increasing interest rates is demand suppression and yet its effectiveness as a demand suppression tool is less than it once was. This article also looks at the role of tuition fees in discriminating against the young and asks if demand suppression is an effective tool in reducing inflation. Fore the whole article, "read more" ...
Intergenerational Equity
