Riksbank paper looks to medieval Europe for ZLB solution
“Gesell tax” on holdings of cash could help central bankers overcome the zero lower bound
Taxing cash holdings could help central banks overcome the zero lower bound, and the experience of medieval monarchs helps shed light on the problem, according to research published on August 9 by Sveriges Riksbank.
A Gesell tax works by reducing the value of cash holdings, achieved in the case of many parts of medieval Europe by the monarch forcing their subjects periodically to exchange their coins for fewer, new coins. The working paper Renovatio monetae: Gesell taxes in practice, by Roger
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