Question
Central banks around the world have been implementing policies to lower interest rates in response to the recession induced by the current pandemic. Economists expect
Central banks around the world have been implementing policies to lower interest rates in response to the recession induced by the current pandemic. Economists expect this low interest rate regime to last for several years.
a) Based on your understanding of resource markets, explain how this is likely to affect the allocation across time of scarce metal resources like, say, platinum or vanadium. Will there be more or less of these resources available to future generations?
b) If you had a subscription to a financial markets data service. What would you expect to observe based on your argument in part (a)?
c) Is this policy response by the central banks consistent with global sustainable use of resources? Explain.
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