IMF paper proposes cash-based solution to zero lower bound

Currency and finance news

“Decoupling” cash from electronic money is feasible, according to a recent paper published by the International Monetary Fund, with major implications for monetary policy and negative rates.

“In our view, the dual local currency system should be considered alongside alternative proposals for keeping monetary policy effective at low interest rates, such as a higher inflation target… or QE,” authors Katrin Assenmacher and Signe Krogstrup state in their paper.

According to the authors, monetary

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