Negative nominal interest rates: History and current proposals

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CAWM Discussion Paper ; No. 43

Classification and Topics

• Classification: Wirtschaft
• Subject: negative interest rates ; history of economic thought ; Silvio Gesell ; zero bound ; search-theoretical models ; monetary policy

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ilgmann, Cordelius ; Menner, Martin
• Event: Veröffentlichung
• (who): Westfälische Wilhelms-Universität Münster, Centrum für Angewandte Wirtschaftsforschung (CAWM)
• (where): Münster
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/51360
• Last update: 10.03.2025, 11:42 AM CET