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It is a bit odd that the answers are so asymmetrical. If falling rates don't prompt rising investment spending, why would rising rates push spending down? One explanation may be that interest rates are already very low. Rates may just have less room to stimulate spending when they are already so close to zero.
There's reason to be cautious about the survey's findings. While some economic theories claim that investment spending should rise directly because of a fall in interest rates, some others have a less direct route that the survey may have accidentally excluded.
The survey asked the CFOs to assume that "demand and cost conditions faced by your firm and industry remain the same." It then asked: "By how much would your borrowing costs have to decrease to cause you to initiate, accelerate, or increase investment projects in the next year?"
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While this assumption of unchanging demand and costs may be great at isolating the direct influence of borrowing costs, it also conceals altogether the possibility that interest rates increase spending by influencing expectations about demand.
In the view of the Austrian School of economics propounded by Friedrich Hayek and Ludwig Von Mises, interest rates affect spending by providing signals about future consumption.
In their view, falling interest rates signal increased savings, which in turn mean that there will be more money available for future consumption. In other words, falling interest rates were the outward sign that people were deciding to consume more in the future and less right now.
So businesses would respond to falling interest rates by increasing long-term investments not because the cost of capital has fallen but because they expect increased future demand.
The survey rules out this mechanism because it requires the assumption that demand remains unchanged despite changes in the interest rate. So what the study shows is something more modest than "interest rate insensitivity"—if demand expectations don't change, then investment plans won't change much either.
Of course, this is only a defect if the assumption isn't realistic. The view of Mises and Hayek that interest rates were signals about savings and consumption were a product of their times.
They were writing about a time when currencies were backed by gold and exchange rates tended to be fixed. Without those constraints, prevailing interest rates do not directly signal anything about current savings and future consumption. Instead, they reflect policy-makers' views on things like what rate will bring about both price stability and low unemployment.
This means that interest rates aren't really very good at communicating to CFOs what to expect in the future. And, in turn, would mean that CFOs wouldn't rely much on interest rates when making plans for the future.