As we spend more, and as companies are pushed to invest, they say, "Hey wait a minute! There's more demand in the system. Let's invest more."
Mohamed El-ErianThe theory is that if you take interest rates negative, people are going to say, "That's a silly game! I'm not going to lend my money to governments who want me to pay them. I am going to go into the stock market where I can get positive returns!"
Mohamed El-Erian[When] the market is trying to get to terms with, first, lower global growth, particularly out of emerging markets and China. And, second, the market is worried the central banks have run out of ammunition. So put these two things together, and then investors are repricing the market lower.
Mohamed El-ErianIf you happen to be the only one with negative interest rates, you also weaken your currency, which means you make your exports more competitive.
Mohamed El-Erian