Zusammenfassung:
Nominal interest rates fell to record-low levels globally in the decades prior to the pandemic. Five economies, Denmark, the euro area, Switzerland, Sweden and Japan, stand out by having adopted negative interest rate policies (NIRP). In this paper, we document that these economies have high levels of private and in most cases also public savings, not matched by investment, relative to other high-income non-NIRP OECD economies. We also show that high savings in NIRP economies are likely to be associated with prudent public finances and population ageing, while the structure of pension systems might also play a role. In the years following the financial crisis and leading up to the pandemic, NIRP economies experienced particularly subdued inflation compared to other advanced economies. This could reflect that equilibrium real interest rates are lower in NIRP economies due to higher savings, making the effective lower bound constraint on monetary policy rates more binding.