Wednesday, February 24, 2016

The Bizarre World of Negative Interest Rates

-Mises Weekends
The concept of negative interest rates, already adopted in Japan, is now under serious consideration in Europe and the US. Here to make sense of this bizarre environment is Paul-Martin Foss, head of the Carl Menger Center and a regular contributor to Paul-Martin explains how Mises and Rothbard understood the function of interest rates, as opposed to how central bankers use interest rates as a tool to stimulate aggregate demand. Can our economic problems really be fixed by forcing banks to make more uneconomic loans to already-insolvent borrowers? And can individuals be forced to spend money by punishing them for leaving it in the bank?


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