Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/200553 
Year of Publication: 
2017
Series/Report no.: 
Working Paper No. 2017-5
Publisher: 
Federal Reserve Bank of Atlanta, Atlanta, Ga.
Abstract: 
We investigate a monetary regime with persistent, near-zero policy interest rates ("permazero" in the terminology of Bullard 2015). This regime was implemented in 1683 by a prominent early central bank called the Bank of Amsterdam ("Bank"). The Bank fixed its policy rate at one-half percent and held it unchanged for more than a century. Maintaining the rate helped stabilize the value of Bank money. We employ archival data to reconstruct the Bank's activities during a portion of that interval (1736-91) for which data are most readily available. The data suggest that "permazero" worked well for long periods because the Bank counteracted market swings with quantitative operations. These same data show how fiscal exploitation denied the Bank sufficient resources to stabilize large shocks, with adverse results.
Subjects: 
central banks
monetary policy
zero lower bound
JEL: 
E58
E65
N13
Document Type: 
Working Paper

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