[imtringued]

The idea of injecting money into the economy by lowering interest rates works but people usually only get loans for houses or cars. No one buys their groceries with loans so they are ineffective at increasing prices in consumer goods and thereby lowering interest rates does not affect inflation despite the massive cash injection.

[csomar]

> No one buys their groceries with loans

Many people do. Credit Cards and Credit lines.

[mcv]

Nobody in Europe does.

But I wonder if credit cards will follow suit and offer negative rates. Somehow I doubt it, though.

[dagw]

Nobody in Europe does.

Bullshit. It's not as popular as in the US, but it's not like credit cards are unheard of here.

[mujina]

At least in Italy, Spain and Germany people mostly use debit cards, and usually not for groceries, but for online purchases.

[mcv]

They're not unheard of, but most people use them primarily for international online payments, and not for groceries.

[penagwin]

> injecting money into the economy by lowering interest rates

But there's still interest rates? People still lose money by taking out a loan to buy a car.

The reason nobody takes a loan for groceries is because groceries are cheap! There's 0 point in taking a loan for groceries unless you literally have no other money.

Meanwhile many people can't afford to buy a car/house with cash, so they're forced to take a loan (and lose money in the long run)

[kgwgk]

In principle low rates increase economic activity, production, labor demand, wages and prices (but it’s true that the theory is not working well lately).