Overcoming the Zero Bound on Nominal interest Rates with Negative Interest on Currency: Gesell's Solution

Buiter, Willem H.; Panigirtzoglou, Nikolaos

doi:10.1111/1468-0297.t01-1-00162

Cited by 108 publications

(94 citation statements)

References 39 publications

(55 reference statements)

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“…For tracking and managing the significant development interest rate is to be addressed a significant economic problem (Boulier, Huang &Taillard, 2001;Laubach, 2009). On the other hand, in the profit and loss statement interest rate also engage in managing the interest component entirely (Buiter & Panigirtzoglou, 2003). In addition, the interest rate also summarizes the way of whole business debt summary, including the receipt of debt, excellence of the debt, expectations of visions participation proportions and fixed floating mixture of the debt ( Brigo & Mercurio, 2006;Einav, Jenkins, & Levin, 2008).Interest rates are applied in various shapes like there are different interest rates for saving account and for taking loan.…”

Section: Interest Ratementioning

confidence: 99%

Impact of Interest Rate Changes on the Profitability of four Major Commercial Banks in Pakistan

Khan¹,

Sattar²

2014

ijafr

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The core objective of this project is to analyze the impact of interest rates changes on the profitability of commercial banks being operated in Pakistan by examining the financial statements of four major banks during 2008 to 2012. Like the efficiency of banking sector is considered most important for economic growth, monetary policy implementation and macro-economic stability. From the past few years, interest spread of banking sector of Pakistan is rising. As a result variations in the interest rate depress the savings and investment and on the other hand it increases the efficiency of banks" lending. In this paper interest rate is an independent variable and bank profitability is a dependent variable. To examine the impact of interest rate changes on the profitability of commercial banks in Pakistan, Pearson correlation method is used in this study. As a result it is found that there is strong and positive correlation between interest rate and commercial banks" profitability. It means if the value of interest rate is increases/decreases then as result value of banks" profitability will also increases/decreases.

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Section: Interest Ratementioning

confidence: 99%

Impact of Interest Rate Changes on the Profitability of four Major Commercial Banks in Pakistan

Khan¹,

Sattar²

2014

ijafr

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“…These findings are upheld by Buiter and Panigirtzoglou (2003) and in NewKeynesian discrete time MIU models with price setting a la Calvo-Woodford (Calvo, 1983;Woodford, 2003) and forward looking Phillips-Curves. Buiter and Panigirtzoglou (2003) study the effects of a Gesell tax in the model of Benhabib et al (2001).…”

Section: Model Based Evaluationmentioning

confidence: 97%

Negative nominal interest rates: history and current proposals

Ilgmann

Menner

2011

Int Econ Econ Policy

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may Abstract:Given the renewed interest in negative interest rates as a means for overcoming the zero bound on nominal interest rates, this article reviews the history of negative nominal interest rates and gives a brief survey over the current proposals that received popular attention in the wake of the financial crisis of 2007/08. It is demonstrated that 'taxing money' proposals have a long intellectual history and that instead of being the conjecture of a monetary crank, they are a serious policy proposal. In a second step the article points out that, besides the more popular debate on a Gesell tax as a means to remove the zero bound on nominal interest rates, there is a class of neoclassical search-models that advocates a negative tax on money as efficiency enhancing. This strand of the literature has so far been largely ignored by the policy debate on negative interest rates.

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“…On the other hand, when several policies are simultaneously considered, their strategic interaction is not allowed for. 11 One strand of the literature considers policies that could mitigate the e¤ects of liquidity traps. The other strand prescribes policies that would prevent the economy from ever falling into a liquidity trap.…”

Section: Our Approach To Modeling a Liquidity Trapmentioning

confidence: 99%

Optimal institutional design when there is a zero lower bound on interest rates

Dhami

al‐Nowaihi

2011

Oxford Economic Papers

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Given the recent experience, there is a growing interest in the liquidity trap; which occurs when the nominal interest rate reaches its zero lower bound. We outline the surprising policy recommendations when there is the possibility of a zero lower bound. Then, using the Dixit-Lambertini (2003) framework of strategic policy interaction between the Treasury and the Central Bank, we …nd that the optimal institutional response to the possibility of a liquidity trap has two main components. First, an optimal in ‡ation target is given to the Central Bank. Second, the Treasury, who retains control over …scal policy and acts as Stackelberg leader, is given optimal output and in ‡ation targets. This institutional solution achieves the optimal rational expectations pre-commitment solution.

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Overcoming the Zero Bound on Nominal interest Rates with Negative Interest on Currency: Gesell's Solution

Cited by 108 publications

References 39 publications

Impact of Interest Rate Changes on the Profitability of four Major Commercial Banks in Pakistan

Impact of Interest Rate Changes on the Profitability of four Major Commercial Banks in Pakistan

Negative nominal interest rates: history and current proposals

Optimal institutional design when there is a zero lower bound on interest rates

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