A leading economist says Australia's record low interest rates are helping to keep the economy afloat and will "stay very low for a long time".

Key points: Economist Warren Hogan says the world is many years away from any significant increase in interest rates

Economist Warren Hogan says the world is many years away from any significant increase in interest rates The "level of crisis" around the Australian economy is not fully understood, according to Mr Hogan

The "level of crisis" around the Australian economy is not fully understood, according to Mr Hogan Australia's economy may be growing, but older Australians are being hit hard by lower interest rates

Warren Hogan says not only could interest rates fall further, but the world is many years away from any significant increase.

"That's a risk and a concern that policymakers don't seem to want to even entertain because of the potential damage that would do to the economy," he said.

But Mr Hogan, who will soon be joining the Federal Treasury to advise the Government on economic policy, argued the "level of crisis" around the Australian economy is not fully understood.

"I don't think we as a broader community get that because things are seemingly OK right now," he said.

"There are plenty of challenges out there and I think those monetary considerations do mean the interest rates are going to stay very low for a long time."

The amount of monetary stimulus being employed around the globe is set to reach an unprecedented level by the end of this year.

Figures released from one of the world's biggest investment banks, JP Morgan, show the amount of global quantitative easing, or money printing, will reach a staggering half a trillion dollars.

The Bank of England, the European Central Bank and the Bank of Japan are all in the market buying bonds to artificially reduce interest rates.

While the Reserve Bank of Australia is not doing that, it has been forced to lower interest rates to record lows in response to their policies

Low interest rates worst for older Australians

Self-funded retiree David Warner has seen his standard of living drop because of extremely low interest rates.

"We certainly have to budget a lot more keenly now, and there may well be some things where maybe we don't go out to dinner as often as we might," he said.

"We certainly have had to adjust our holidays because obviously holidays are a reasonably expensive pursuit.

"Instead of going and trying to do that once every 12 months, we'd be looking at probably once every 18 months now."

Mr Warner said the economic pressures as a result of low interest rates are hitting older Australians particularly hard.

"Most of those [expenses] are going up, and health costs especially, and they all affect the older people."

"So as you become a little older, you become locked into inflationary spending of what I'll call sort of compulsory spending, if you will, to look after yourself and maintain yourself."

Mr Warner said the prospect of lessening income made him feel "uneasy".

"[You're] trying to do that in an environment where if interest rates continue to fall, you're going to have your income falling," he said.

He is also worried about his children, aged 41 and 39, who are unable to afford a home to live in.

"They both have been as yet unable to save the required amount of money to make an investment into a property."