Silvana Tenreyro has been arguing for a while that negative interest rates are a *feasible* AND *efficient* way to stimulate the economy and this speech from her is the best summary so far I have seen about it. Main points are: 1/ theguardian.com/business/2021/…
"The financial-market channels of monetary policy transmission have worked effectively under negative rates in other countries". That is, negative rates lower cost of capital,depreciate the exchange rate & increase asset prices, all of which increase investment and consumption 2/
"The evidence on the bank lending channel is that negative interest rates have been effective in boosting lending & activity, without clear evidence that they have damaged bank profits"
Negative rates increase lending and are not found to be the cause of low profits for banks 3/
If you are interested in the topic of public perceptions & beliefs, views towards redistribution & economic policy and populism, here is a long thread inspired by some exciting recent research by @S_Stantcheva (as presented at #eubef19) and by Guido Tabellini in Milano. 1/22
The message of @S_Stantcheva superb TED Talk: researchers should “listen” to people & gather information about their perceptions & views – using rigorous large online surveys, that are well-designed & targeted - that can help devise optimal policies 2/22
Our perceptions determine our votes for different policies. This is relevant to ensure people dont fall for easy solutions. In a paper last year e.g., @S_Stantcheva, Alesina & A Miano show how striking & widespread misperceptions about migration are. 3/22 voxeu.org/article/misper…