, 6 tweets, 4 min read Read on Twitter
The discussion about negative rates and the "natural interest rate" (central bank fairy) should be directed to its effects to

1) The banking sector, and
2) The real economy.

We already know that the effects to the banking sector have not been good. 👇1/
What is missing, however, is the understanding on its effects to the real economy.

We've tried to raise this awareness several times, lately in the March issue of our Q-Review. 👇 2/
The Bank of International Settlements (the 'central bank of central banks') have also raised alarms, as nicely summarized by @MishGEA. 3/
Two recent noticeable academic papers have also dealt with the issue:

Liu, Mian and Sufi (market concentration and productivity): nber.org/papers/w25505

Carletti and Ferrero (effects of NIRP environment): dnb.nl/en/binaries/pa…
Then there's the 'zombie issue'.

When bailouts and NIRP lead to unhealthy banking sector, as they have, it starts to feed unprofitable firms (to keep them from failing).

This stagnates productivity growth and creates a fragile #economy . 5/
Now, finally, economists and journalists should acknowledge the major risks of further central bank meddling.

The monetary experiment has failed and pushing it to its limits will only cause deeper economic malaise. 6/6
@CNBCJulianna @SaraEisen @dlacalle_IA @DiMartinoBooth
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