Polter,Regarding the low interest rates leading to a limited outcome space, I'm not understanding what you mean.Isn't a low interest-rate environment empirically correlated with increased investment in long-term assets? If I have a proposed investment that involves multiple years of certain negative cash flow followed by probable years of positive cash flow (e.g. R&D, new product development, factory construction, international expansion), then wouldn't I be more likely to borrow money when it is cheap? In contrast, in a high-rate environment, such investments have negative NPVs due to high accumulated interest. And if I have two projects with the same high IRR > i, then wouldn't I prefer the investment that generates IRR - i profits for the longer term?Now, I certainly do agree that low interest rates also encourages speculation -- when money is cheap, it can (and will) be borrowed for leverage for speculative buying and selling. As the interest rate decreases, a speculator will use increasing borrowed money for an increasing range of trades. Moreover, low rates do encourage return-seeking, risk-taking behaviors, but those occur across the duration spectrum.Perhaps a bit more about this research topic would help me understand.P.S. I agree with Taylor on the role of low rates in the current crisis. Low mortgage rates meant low monthly payments on homes which meant people could afford much higher asset prices. This, in turn, created much higher capital gains on existing houses which were then rolled into even more and more expensive homes. Finally, declining interest rates in the context of more efficient financial services enabled cash-out refinancing. Cash out meant the person could have the same monthly payment, but be instantly richer in cash which they would pump into the economy. There were other exacerbating factors, such as the end of the tax deductibility of all but mortgage interest and the decline in required downpayments/LTV (which is a massive source of systemic risk to this day).