THE CONSEQUENCES OF ZERO-RATE INTEREST POLICIES FOR MIDDLE CLASS HOUSEHOLDS IN GERMANY

15 April 2019
C. Liebetruth

 

Following the financial crisis, interest rates have reached (long-term) historical lows. For middle-class households in Germany, which are traditionally risk-averse and rely on savings, it is increasingly difficult to accumulate wealth in preparation for old age. The advantages of low capital costs are balanced out by high real estate prices, so housebuying is no alternative and almost inachievable for young people. A large share of the German population expects decreasing consumption in old age and many fear outright poverty. See also OECD-publication Under Pressure: The Squeezed Middle Class.

Literature on middle class families in times of zero interest rates in EconBiz: