# Paradox of credibility

- Canonical URL: https://www.gerhardmerk.de/paradox-of-credibility
- Post ID: 592956
- Modified: 2023-07-25T21:13:44+00:00
- Language: en

## Definition

A term that emerged around 2005 in connection with monetary policy to describe the fact that - when a central bank pursues a credible monetary policy - it keeps inflation and thus interest rates low, - many investors around the world turn to high-risk financial products in pursuit of high returns. The consequences of the subprime crisis have been (partly) explained in this way by some observers. - See Carry Traders, Elizabeth Question. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

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