Zero interest rate policy

From Wikipedia, the free encyclopedia

The zero interest rate policy (ZIRP) is a Keynesian macroeconomics scheme for economies exhibiting slow growth with a very low interest rate, such as contemporary Japan and since, December 16, 2008, the United States.

Under ZIRP, the central bank maintains a 0% nominal interest rate. The intended effect of a ZIRP is to encourage investment throughout the economy by making capital purchases more financially attractive. Whether ZIRP succeeds in achieving this goal is a matter of much debate.

[edit] See also

• History of Federal Open Market Committee actions
• Federal funds rate
• Liquidity trap
• Real interest rate
• Stagflation

[edit] Further reading

• Eggertsson, Gauti B.; Woodford, Michael (2003). "The Zero Bound on Interest Rates and Optimal Monetary Policy". Brookings Papers on Economic Activity 2003 (1): 139–211. http://www.jstor.org/pss/1209148. 

[edit] External links

• A Rate of Zero Percent From the Fed? Some Analysts Say It Could Be Coming
• Monetary Policy Alternatives at the Zero Bound: An Empirical Assessment
• Fed Funds Rate: Turning Japanese, I Really Think So
• Nominal Interest Rates: Less Than Zero?
• Bank-of-Japan gives away money interest-free
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• Hopes for the Future of Islamic Finance