Access

You are not currently logged in.

Access JSTOR through your library or other institution:

login

Log in through your institution.

Overcoming the Zero Bound on Interest Rate Policy

Marvin Goodfriend
Journal of Money, Credit and Banking
Vol. 32, No. 4, Part 2: Monetary Policy in a Low-Inflation Environment (Nov., 2000), pp. 1007-1035
DOI: 10.2307/2601157
Stable URL: http://www.jstor.org/stable/2601157
Page Count: 29
  • Subscribe ($19.50)
  • Cite this Item
Overcoming the Zero Bound on Interest Rate Policy
Preview not available

Abstract

The paper proposes three options for overcoming the zero bound on interest rate policy: a carry tax on money, open market operations in long bonds, and monetary transfers. A variable carry tax on electronic bank reserves could enable a central bank to target negative nominal interest rates. A carry tax could be imposed on currency to create more leeway to make interest rates negative. Quantitative policy-monetary transfers and open market purchases of long bonds-could stimulate the economy by creating liquidity broadly defined. A central bank needs more fiscal support than usual from the Treasury to pursue quantitative policy at the interest rate floor.

Page Thumbnails

  • Thumbnail: Page 
[1007]
    [1007]
  • Thumbnail: Page 
1008
    1008
  • Thumbnail: Page 
1009
    1009
  • Thumbnail: Page 
1010
    1010
  • Thumbnail: Page 
1011
    1011
  • Thumbnail: Page 
1012
    1012
  • Thumbnail: Page 
1013
    1013
  • Thumbnail: Page 
1014
    1014
  • Thumbnail: Page 
1015
    1015
  • Thumbnail: Page 
1016
    1016
  • Thumbnail: Page 
1017
    1017
  • Thumbnail: Page 
1018
    1018
  • Thumbnail: Page 
1019
    1019
  • Thumbnail: Page 
1020
    1020
  • Thumbnail: Page 
1021
    1021
  • Thumbnail: Page 
1022
    1022
  • Thumbnail: Page 
1023
    1023
  • Thumbnail: Page 
1024
    1024
  • Thumbnail: Page 
1025
    1025
  • Thumbnail: Page 
1026
    1026
  • Thumbnail: Page 
1027
    1027
  • Thumbnail: Page 
1028
    1028
  • Thumbnail: Page 
1029
    1029
  • Thumbnail: Page 
1030
    1030
  • Thumbnail: Page 
1031
    1031
  • Thumbnail: Page 
1032
    1032
  • Thumbnail: Page 
1033
    1033
  • Thumbnail: Page 
1034
    1034
  • Thumbnail: Page 
1035
    1035