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 domain over which the central bank can vary its 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 which can be set to achieve a forward discount (expected depreciation) of the currency vis-a-vis the numéraire when the nominal interest rate in terms of the numéraire is set at a negative level for monetary policy purposes.
|Date of creation:||Jun 2009|
|Date of revision:|
|Publication status:||published as Buiter, Willem H., 2009. "Negative nominal interest rates: Three ways to overcome the zero lower bound," The North American Journal of Economics and Finance, Elsevier, vol. 20(3), pages 213-238, December.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Buiter, Willem H. & Sibert, Anne C., 2007.
Cambridge University Press, vol. 11(04), pages 431-454, September.
- Buiter, Willem H. & Sibert, Anne, 2004. "Deflationary Bubbles," CEPR Discussion Papers 4528, C.E.P.R. Discussion Papers.
- Willem H. Buiter & Anne C. Sibert, 2004. "Deflationary Bubbles," NBER Working Papers 10642, National Bureau of Economic Research, Inc.
- Willem Buiter & Anne Sibert, 2004. "Deflationary Bubbles," Birkbeck Working Papers in Economics and Finance 0409, Birkbeck, Department of Economics, Mathematics & Statistics.
- Buiter, Willem H. & Sibert, Anne, 2006. "Deflationary Bubbles," CEPR Discussion Papers 5637, C.E.P.R. Discussion Papers.
- Willem H. Buiter & Anne C. Sibert, 2007. "Deflationary bubbles," LSE Research Online Documents on Economics 3323, London School of Economics and Political Science, LSE Library.
- Willem H. Buiter & Nikolaos Panigirtzoglou, 2003.
"Overcoming the zero bound on nominal interest rates with negative interest on currency: gesell's solution,"
Royal Economic Society, vol. 113(490), pages 723-746, October.
- Willem H. Buiter, 2003. "Overcoming the zero bound on nominal interest rates with negative interest on currency : Gesell's solution," LSE Research Online Documents on Economics 848, London School of Economics and Political Science, LSE Library.
- Robert E. Hall, 1999.
"Controlling the Price Level,"
NBER Working Papers
6914, National Bureau of Economic Research, Inc.
- Mitsuhiro Fukao, 2005. "The Effects of 'Gesell' (Currency) Taxes in Promoting Japan's Economic Recovery," Hi-Stat Discussion Paper Series d05-94, Institute of Economic Research, Hitotsubashi University.
- M. Fase, 2005. "On Economics and Religion," De Economist, Springer, vol. 153(1), pages 85-106, December.
- Buiter, Willem H., 2004.
"Helicopter Money: Irredeemable Fiat Money and the Liquidity Trap,"
CEPR Discussion Papers
4202, C.E.P.R. Discussion Papers.
- Willem H. Buiter, 2003. "Helicopter Money: Irredeemable Fiat Money and the Liquidity Trap," NBER Working Papers 10163, National Bureau of Economic Research, Inc.
- Marvin Goodfriend, 2000.
"Overcoming the zero bound on interest rate policy,"
Conference Series ; [Proceedings],
Federal Reserve Bank of Boston, pages 1007-1057.
- Edgar L. Feige & Michael Faulend & Velimir Sonje & Vedran Sosic, 2001. "Currency Substitution, Unoffical Dollarization and Estimates of Foreign Currency Held Abroad: The Case of Croatia," International Finance 0106001, EconWPA.
- W. Bolt, 2003. "Retail Payments in the Netherlands: some Facts and Some Theory," WO Research Memoranda (discontinued) 722, Netherlands Central Bank, Research Department.
- Hall, Robert E., 1983. "Optimal fiduciary monetary systems," Journal of Monetary Economics, Elsevier, vol. 12(1), pages 33-50.
- Wilko Bolt, 2006. "Retail Payments in the Netherlands: Facts and Theory," De Economist, Springer, vol. 154(3), pages 345-372, September.
- Kenneth Rogoff, 1998. "Blessing or curse? Foreign and underground demand for euro notes," Economic Policy, CEPR;CES;MSH, vol. 13(26), pages 261-303, 04.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:15118. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.