Negative Interest Rate Policies: Taking Stock of the Experience So Far
For almost 10 years, several central banks in advanced economies have cut and maintained their key policy rates below zero. Central banks in Denmark, the euro area, Japan, Sweden, and Switzerland had turned to such policies in response to persistently below-target inflation rates and a very low neutral real interest rate. However, negative rate policies remain controversial, and their potential side effects are subject to much debate. This paper surveys the body of research that has grown out of the experience with the policy to date, and takes stock of the evidence. Overall, the experience with negative rates has broadly been positive. Lending and deposit rates fell following the adoption of NIRP. Bank lending volumes rose, and bank profits for the most part did not significantly deteriorate.
Year of publication: |
2021
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Authors: | Brandao-Marques, Luis ; Casiraghi, Marco ; Gelos, Gaston ; Kamber, Gunes ; Meeks, Roland |
Published in: |
CESifo Forum. - München : ifo Institut - Leibniz-Institut für Wirtschaftsforschung an der Universität München, ISSN 2190-717X. - Vol. 22.2021, 06, p. 27-32
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Publisher: |
München : ifo Institut - Leibniz-Institut für Wirtschaftsforschung an der Universität München |
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