Summary of An Early Experiment with “Permazero”

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You might think that measures such as quantitative easing and zero interest rate policies are modern solutions, but even in central banking, there is truly nothing new under the sun. Economists Stephen Quinn and William Roberds delve into how the Bank of Amsterdam, starting in 1683, maintained a near-zero interest rate for more than 100 years. getAbstract suggests this intriguing account, despite its somewhat labored presentation, to bankers, economists and investors for the historical perspective it offers in the debate on present-day monetary policies.

In this summary, you will learn

  • How the Bank of Amsterdam engaged in unconventional monetary policies during the 17th and 18th centuries,
  • What obstacles the bank faced, and
  • What lesson this early monetary easing experience offers to today’s central bankers.

About the Authors

Stephen Quinn is an associate professor of economics at Texas Christian University. William Roberds is a research economist with the Federal Reserve Bank of Atlanta.



Following the 2008 financial crisis, central banks had to resort to creative monetary easing. Although economists have dubbed such moves “unprecedented,” history offers the example of at least one bank that kept a close-to-zero interest rate policy for an extended period of time. The Bank of Amsterdam started offering loans at 0.5% annually in 1683 and held on to this rate until the bank went out of business in 1795. This persistently low interest rate stabilized the value of the bank’s currency, “the bank florin or bank guilder.” The Dutch money market welcomed the move, which helped make the bank’s money the prevailing European currency of the time.

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