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Title:Negative nominal interest rates: History and current proposals PDF Logo
Authors:Ilgmann, Cordelius
Menner, Martin
Issue Date:2011
Series/Report no.:CAWM discussion paper / Centrum für Angewandte Wirtschaftsforschung Münster 43
Abstract:Given the renewed interest in negative interest rates as a means for overcoming the zero bound on nominal interest rates, this article reviews the history of negative nominal interest rates and gives a brief survey over the current proposals that received popular attention in the wake of the financial crisis of 2007/08. It is demonstrated that taxing money proposals have a long intellectual history and that instead of being the conjecture of a monetary crank, they are a serious policy proposal. In a second step the article points out that, besides the more popular debate on a Gesell tax as a means to remove the zero bound on nominal interest rates, there is a class of neoclassical search-models that advocates a negative tax on money as efficiency enhancing. This strand of the literature has so far been largely ignored by the policy debate on negative interest rates.
Subjects:negative interest rates
history of economic thought
Silvio Gesell
zero bound
search-theoretical models
monetary policy
Document Type:Working Paper
Appears in Collections:CAWM Discussion Papers, Universität Münster

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