The False Promise Of Negative Interest Rates

The False Promise Of Negative Interest Rates by Robert Skidelsky, SwissInfo.ch

As a biographer and aficionado of John Maynard Keynes, I am sometimes asked: “What would Keynes think about negative interest rates?”

It’s a good question, one that recalls a passage in Keynes’s General Theory in which he notes that if the government can’t think of anything more sensible to do to cure unemployment (say, building houses), burying bottles filled with bank notes and digging them up again would be better than nothing. He probably would have said the same about negative interest rates: a desperate measure by governments that can think of nothing else to do.

Negative interest rates are simply the latest fruitless effort since the 2008 global...