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.
In this summary, you will learn
- Which countries have instituted negative interest rates,
- How the rates work in theory and in practice, and
- How effective they’ve been so far in spurring growth.
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.