Negative interest rates: a Keynesian perspective

Autor:	Fiona Maclachlan
Rok vydání:	2019
Předmět:	Economics and Econometrics media_common.quotation_subject Bond Keynesian economics Financial market Monetary policy Liquidity preference Zero lower bound Economics Post-Keynesian economics Interest rate media_common Market liquidity
Zdroj:	Review of Keynesian Economics. 7:171-184
ISSN:	2049-5331 2049-5323
Popis:	One of the most surprising recent developments in financial markets has been the emergence of negative yields on long-term debt. This development contradicts the notion of the zero lower bound which, until recently, was taken as a given in monetary policy discussions. In this paper, I look at the phenomenon of negative yields through the lens of Keynes's liquidity-preference theory of interest. I review changes to the financial market environment that have led to a shift in the liquidity of government bonds relative to bank deposits, and with this empirical context in place, I argue Keynes's theory is consistent with the phenomenon of negative bond yields. Finally, I consider Keynes's thought in relation to a negative interest-rate policy (NIRP) and argue that while he would be opposed to a NIRP as a temporary expedient, a mildly negative policy rate fits with his long-run vision for a world with a zero risk-free long-term interest rate.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::e786f6dbd982f44aabdfb65c4a3b7152 https://doi.org/10.4337/roke.2019.02.04 Zobrazit plný text záznamu