Negative interest rates become ‘feasible’ with the elimination of cash – paper
A working paper published by the IMF has said “de-cashing” could make negative interest rates a “feasible option” while also improving the transmission mechanism of monetary policy in general.
The paper, authored by Alexei Kireyev, examines the macroeconomic impacts of removing cash from circulation and replacing it with convertible deposits.
Kireyev argues currency has “largely” lost its role in monetary policy – particularly in developed countries – as the amount of currency in circulation
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