I ponder this once in a while. Or a variation of it.
Traditional monetary theory holds that lower interest rates juice the economy by making borrowing easier. Higher interest rates subdue borrowing and have a dampening effect on the economy.
However, this only works perfectly in closed systems. In global systems some investors can game this by borrowing low in one semi-closed economy and invest in a higher rate area (so-called “carry trades”). If enough money flows to the areas with higher rates, traditional monetary theory will be turned on its head.
