The intention is to help bring down the cost of borrowing and reduce the financial burden on firms and households. Lower policy rates would also shore up business and consumer confidence for economic expansion.
The large flows of direct investment by US firms in Mexico and other countries of Latin America and in China and other Asian countries relate in good part to relatively low-tech production; in the emerging economies mid-tech production is also gaining ground. Investment in services and high-tech production continues to be concentrated in the developed countries.