The framing of this topic raises the question of whether low interest rates have somehow undermined the stability and functioning of the financial system. I will argue that “low for long” interest rates have supported slow but steady progress to full employment and stable prices, which has in turn supported financial stability.
This linkage was primarily represented by the round trip voyages that the Galleon ships made between Acapulco, Mexico and Manila’s ports, just about a kilometer away from where we stand right now.