TY - BOOK ID - 65579310 TI - Enabling Deep Negative Rates to Fight Recessions: A Guide AU - Agarwal, Ruchir. AU - Kimball, Miles. PY - 2019 SN - 1498312470 1484398777 1498312462 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Economic policy. KW - Economic nationalism KW - Economic planning KW - National planning KW - State planning KW - Economics KW - Planning KW - National security KW - Social policy KW - Banks and Banking KW - Money and Monetary Policy KW - Industries: Financial Services KW - Monetary Systems KW - Standards KW - Regimes KW - Government and the Monetary System KW - Payment Systems KW - Banks KW - Depository Institutions KW - Micro Finance Institutions KW - Mortgages KW - Interest Rates: Determination, Term Structure, and Effects KW - Monetary economics KW - Banking KW - Distributed ledgers KW - Finance KW - Currencies KW - Negative interest rates KW - Digital currencies KW - Central bank policy rate KW - Money KW - Monetary policy KW - Technology KW - Financial services KW - Zero lower bound KW - Banks and banking KW - Interest rates KW - Financial services industry KW - Technological innovations KW - United States UR - https://www.unicat.be/uniCat?func=search&query=sysid:65579310 AB - The experience of the Great Recession and its aftermath revealed that a lower bound on interest rates can be a serious obstacle for fighting recessions. However, the zero lower bound is not a law of nature; it is a policy choice. The central message of this paper is that with readily available tools a central bank can enable deep negative rates whenever needed—thus maintaining the power of monetary policy in the future to end recessions within a short time. This paper demonstrates that a subset of these tools can have a big effect in enabling deep negative rates with administratively small actions on the part of the central bank. To that end, we (i) survey approaches to enable deep negative rates discussed in the literature and present new approaches; (ii) establish how a subset of these approaches allows enabling negative rates while remaining at a minimum distance from the current paper currency policy and minimizing the political costs; (iii) discuss why standard transmission mechanisms from interest rates to aggregate demand are likely to remain unchanged in deep negative rate territory; and (iv) present communication tools that central banks can use both now and in the event to facilitate broader political acceptance of negative interest rate policy at the onset of the next serious recession. ER -