House prices reflect nominal interest rates
as well as real interest rates.
Nominal interest rates
are subject to a physical lower bound.
To avoid this problem, Evans argues that monetary policy should focus on lessening the odds that nominal interest rates
again hit zero.
He argues that a stable interest rate peg is a realistic theoretical possibility; that it has some mild empirical support based on a cursory look at the data; and that, should we find ourselves in a persistent state of low nominal interest rates
and low inflation, some of our fundamental assumptions about how U.
A top official with the IMF said, 'Although the experience with negative nominal interest rates
is limited, we tentatively conclude that overall they help deliver additional monetary stimulus and easier financial conditions.
A more sophisticated argument against Joan Robinson's claim would be that nominal interest rates
don't matter, and that real interest rates are the proper measure of the stance of monetary policy.
Before the recession, nominal interest rates
in these countries were around 4 percent.
In the paper we analyze sources of the short-term nominal interest rates
fluctuations in ten European transition economies.
Inasmuch as the co-movement of nominal stock returns and nominal interest rates
could be due to changes in expected inflation, the hypothesis is tested using real as well as nominal return data.
The VP added, "High nominal interest rates
stymies the appetite for the private sector to borrow because when plug in 20% or more interest rate to any project profitability becomes difficult.
Through financial repression and broadly accommodative monetary policy, nominal interest rates
have been kept low even while inflation was high.
He also closely examines the global financial crisis in terms of an unprecedented configuration for monetary policy, the new mantras of the 1990s macroeconomics model, transparency as an essential feature of monetary policy, credibility, price stability, interest-setting policies, inflation targeting, exchange rate movements, zero-based nominal interest rates
, austerity measures v.