National Bureau of Economic Research
NBER: Paying negative interest on base money to avoid the zero bound

Subject: Paying negative interest on base money to avoid the zero bound
From: willembuiter (willembuiter@whsmithnet.co.uk)
Date: Tue Oct 29 2002 - 14:25:27 EST

Colleagues,

about three and a half years since its conception, the paper by myself and Nikolaos Panigirtzoglou that started life as "Liquidity Traps: How to Avoid Them and How to Escape Them" , (see e.g. NBER Working Paper No. W7245, July 1999) has made it to the finish line. It will be published as "Overcoming the Zero Bound on Nominal Interest Rates with Negative Interest Rates on Currency: Gesell's Solution", in the Economic Journal, sometime in 2003.

For an abstract (a pdf file), click here: http://www.nber.org/~wbuiter/liqab.pdf

For the whole enchilada (also a pdf file), click here: http://www.nber.org/~wbuiter/liqnew.pdf

Sincerely,

Willem H. Buiter

Chief Economist, European Bank for Reconstruction and Development