Is Cutting Interest Rates in Europe a Good Idea?

Hi all,

Last week, the European Central Bank cut the interest rates for loans from them to 0.25 % (from 0.50 %). Do the really think that this is a good idea? I realise that they want to raise inflation, however, flooding the market is not the right tool for this any more – instead of raising inflation they are raising stock exchange indexes.

If we want to raise inflation, we have to give money to the people who really need to buy something from the real economy – the poor ones. So, instead of flooding the markets with more and more money, give it to the states so they are able to afford infrastructure projects. They will have to contract companies who have to take up people -> That’s the way we raise inflation!