Subject: Paying negative interest on base money to avoid the zero bound
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
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