Negative interest rates remain a controversial policy for central banks. We study a novel signalling channel and ask under what conditions negative rates should exist in an optimal policymaker’s toolkit. We prove two necessary conditions for the optimality of negative rates: a time-consistent...

The paper focuses on the estimation of the effective lower bound for the Czech National Bank's policy rate. The effective lower bound is determined by the value below which holding and using cash would be more convenient than deposits with negative yields. This bound is approximated based on...

This note proposes an alternative way to assess the usefulness of central banks' forward guidance since the start of the global economic crisis, and provides a quantitative assessment of the size of the expansionary monetary impulses, as expressed through the communication policies of four...

We provide an overview of the operational implementation of negative interest rates in Europe and Japan, drawing attention to the fact that there is precedent for negative policy rates and negative money market rates. We then address conceptual issues and summarize measures which define negative...