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Fredrik NG Andersson. Photo.

Fredrik N G Andersson

Associate professor

Fredrik NG Andersson. Photo.

Don’t do it again! The Swedish experience with negative central bank rates in 2015-2019

Author

  • Fredrik N G Andersson
  • Lars Jonung

Summary, in English

Negative interest rates were once seen as impossible outside the realm of economic theory. However, recently several central banks have imposed such rates, with prominent economists supporting this move. This column investigates the actual effects of negative interest rates, taking evidence from the Swedish experience during 2015-2019. It is evident that the policy’s effect on the inflation rate was modest, and that it contributed to increased financial vulnerabilities. The lesson from the experiment is clear: Do not do it again.

Department/s

  • Department of Economics

Publishing year

2020-05-08

Language

English

Document type

Web publication

Publisher

voxeu.org

Topic

  • Economics

Keywords

  • monetary policy
  • negative interest rates
  • Riksbank
  • Sweden

Status

Published

Research group

  • Knut Wicksell Centre for Financial Studies