Summary of Negative Interest Rates

Looking for the article?
We have the summary! Get the key insights in just 5 minutes.

Negative Interest Rates summary

Editorial Rating



  • Well Structured
  • Overview
  • For Beginners


In today’s environment of low growth and subdued inflation, central bankers in some countries are experimenting with negative interest rates to see how far they can go to boost economies without inciting a public backlash. But how do negative interest rates work, and are they actually effective in stimulating growth? Economists Jennifer Blanke and Signe Krogstrup delve into the matter in this informative report, outlining the practical aspects and potential ramifications of negative interest rates. getAbstract recommends their succinct and accessible article to investors and executives for its perspective on a new wrinkle in monetary policy.

About the Authors

Jennifer Blanke is chief economist at the World Economic Forum. Signe Krogstrup is an adviser with the International Monetary Fund’s research department.


The subpar economic growth of recent years has led some central banks to venture into negative interest rate territory in a bid to boost inflation and growth. The Danish central bank started the trend in 2012, followed by some European central banks in 2014 and the Bank of Japan in 2016. Though negative interest rates are just an extension of accommodative monetary policy that takes interest rates below zero, they pack a psychological punch.

Conventional thinking once posited that short-term interest rates below zero would induce people to keep their cash on hand, ...

Comment on this summary

More on this topic

Could Negative Interest Rates in the US Ever Happen?
Banks are paying people to borrow money. That’s alarming news for the global economy.
Who Needs Bonds Anyway?
The Great Demographic Reversal
Raising the Inflation Target
An Old Tool to Fight a New Recession

Related Channels