Samantha Lee / Business InsiderIf you’re a bank, the idea sounds crazy. Why pay someone to hold your cash? In 1983, when Frederic Mishkin started writing "The Economics of Money, Banking and Financial Markets," his seminal textbook on macroeconomics, he never thought he'd devote much space to the idea of negative interest rates. "A million years no," Mishkin told Business Insider. Negative rates were seen as a bizarre thought exercise by academic economists, not something any of us would see in the real world. It was "absolutely unthinkable when I started writing this book," Mishkin, a former Federal Reserve governor and professor at Columbia Business School, said. In fact, it took just about 30 years.
Economists Never Imagined Negative Interest Rates — Now They're Rewriting Textbooks
feedback@businessinsider.com (Dan Bobkoff), Business Insider
Sun, 10/23/2016 - 3:00am
Topics: the economics of money, banking and financial markets, the curse of cash. frederic mishkin negative columbia business school asia board chair janet yellen uk changing kenneth rogoff harvard ldquo;everyone ldquo;if i&rsquo breaking mishkin&rsquo when qe ldquo;you sweden's riksbank european central ecb president mario draghi italy today watch ken rogoff raw embed central fed&rsquo marc bushallow manning napier rogoff&rsquo watch samantha lee business insider mishkin it federal reserve great recession rogoff rogoff fed qe japan sweden denmark switzerland central ken rogoff economists textbooks pay economy started savings inflation consumers set idea policy years lend told big lending costs lends eventually world alternative economies professor mortgages deposit takes thought future places talk car save hit it’s bills space unthinkable we’d late didn’t happen crises slightly writing spain forced account depositors paying loans hold important boost people accounts
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