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The problem with waiting too long is that the interest rate situation could be dramatically different in a year.
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They also argue that while some studies have found lower multipliers, their study is more likely to be applicable to the low-interest-rate situation we now find ourselves in: normally Fed policy "leans against" increases in federal spending, which leads to the multiplier effect being seemingly lower.
This would leave them exposed if banks adopt charges for holding deposits in the event of negative interest rates – a situation highlighted after Royal Bank of Scotland and its NatWest arm wrote to small businesses to warn them it might charge to hold deposits.
In a zero interest rate environment and a situation where a pension needs to get returns of 8 percent on average, someone who is coming by and saying they can deliver upward of 20 percent is very attractive.
Though there is no room left for interest rate reductions to help the situation, Mr. Hayami said the bank-reserve target could be raised further if necessary.
Unfortunately, the Federal Reserve's current interest rate policy is making the situation worse.
And rising inflation combined with an increase in interest rates is another situation that could torpedo market sentiment.
"In most situations, the interest rate on a second home is the same as a primary residence," said Doug Perry, a senior vice president at Countrywide Home Loans, one of the nation's biggest lenders.
Friedman posits some limitations to the above theoretical propositions, arguing that the Keynesian explanation cannot explain the situations where interest rate displays a positive response to money supply growth.
Economic experts, however, say that Central Bank's bid to salvage the situation with a interest rate rise of 6.5 percentage points has only worsened the crisis.
In other situations, you can get a loan, but your interest rate will be extortionate.
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