Negative nominal interest rates: Three ways to overcome the zero lower bound
The paper considers three methods for eliminating the zero lower bound on nominal interest rates and thus for restoring symmetry to the domain over which the Central Bank can vary its official policy rate. They are: (1) abolishing currency (which would also be a useful crime-fighting measure); (2) p...
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| Veröffentlicht in: | The North American journal of economics and finance 2009-12, Vol.20 (3), p.213-238 |
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| container_title | The North American journal of economics and finance |
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| creator | Buiter, Willem H. |
| description | The paper considers three methods for eliminating the zero lower bound on nominal interest rates and thus for restoring symmetry to the domain over which the Central Bank can vary its official policy rate. They are: (1) abolishing currency (which would also be a useful crime-fighting measure); (2) paying negative interest on currency by taxing currency; and (3) decoupling the numéraire from the currency/medium of exchange/means of payment and introducing an exchange rate between the numéraire and the currency; this exchange rate can be set over time to achieve a forward discount (expected depreciation) of the currency vis-à-vis the numéraire when the nominal interest rate in terms of the numéraire is set at a negative level for monetary policy purposes. |
| doi_str_mv | 10.1016/j.najef.2009.10.001 |
| format | Article |
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| identifier | ISSN: 1062-9408 |
| ispartof | The North American journal of economics and finance, 2009-12, Vol.20 (3), p.213-238 |
| issn | 1062-9408 1879-0860 |
| language | eng |
| recordid | cdi_proquest_journals_201220459 |
| source | RePEc; Elsevier ScienceDirect Journals |
| subjects | Depreciation Eisler Foreign exchange rates Gesell Interest rates Liquidity trap Monetary policy Monetary policy Zero interest rate policy Liquidity trap Quantitative easing Gesell Eisler Quantitative easing Studies Zero interest rate policy |
| title | Negative nominal interest rates: Three ways to overcome the zero lower bound |
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