Haldane weighs solutions to ZLB constraint

andy-haldane
Andrew Haldane, chief economist at the Bank of England

Bank of England chief economist Andrew Haldane highlighted the potential of central bank-issued digital currencies to help overcome the zero lower bound (ZLB) constraint today (September 18), but cautioned its feasibility was "very much an open question".

The technological constraint posed by the ZLB stems from the inability to impose negative interest rates on currency. This means people have an incentive to flee to cash when negative rates are imposed on bank reserves.

Some consider the ZLB to

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