Ineffective ECB medicine - capital costs immune to zero interest rate

Despite an ultra-looser monetary policy, investment activity by major German corporations remains weak. The study shows that this is partly due to the consistently high cost of capital.

The DAX-30 companies continue to expect an average cost rate of around nine percent before taxes. Despite the disappearance of interest rates, the investors have apparently hardly adjusted their yield requirements. It thus appears that the investors are immune to monetary policy stimuli when determining their claims.

Please note: This study is available in German only.

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