The paper proposes three options for overcoming the zero bound on interest rate policy: a carry tax on money, open market operations in long bonds, and monetary transfers. A variable carry tax on electronic bank reserves could enable a central bank to target negative nominal interest rates. A...

Intro -- Contents -- I. INTRODUCTION AND OVERVIEW -- II. LOW INFLATION OBJECTIVE AS NOMINAL ANCHOR -- III. PRINCIPLES OF MONETARY POLICY GEARED TOWARD TARGETING INFLATION -- IV. INSTITUTIONAL SUPPORT FOR INDEPENDENT MONETARY POLICY -- V. MONETARY AND BANKING INSTITUTIONS IN CHINA -- VI....