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An Early Experiment with “Permazero”
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An Early Experiment with “Permazero”


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Editorial Rating

7

Qualities

  • Analytical
  • Well Structured
  • For Experts

Recommendation

You might think that measures such as quantitative easing and zero interest rate policies are modern solutions, but even in central banking, there is truly nothing new under the sun. Economists Stephen Quinn and William Roberds delve into how the Bank of Amsterdam, starting in 1683, maintained a near-zero interest rate for more than 100 years. getAbstract suggests this intriguing account, despite its somewhat labored presentation, to bankers, economists and investors for the historical perspective it offers in the debate on present-day monetary policies.

Take-Aways

  • The Bank of Amsterdam’s unconventional monetary policy consisted of keeping a near-zero interest rate from 1683 through 1795.
  • This persistently low interest rate stabilized the value of the bank’s currency, which predominated European trade at the time.
  • The bank’s monetary tightening campaign in the 1750s involved some 15 million bank florins, which then accounted for 6% of Dutch economic output.

About the Authors

Stephen Quinn is an associate professor of economics at Texas Christian University. William Roberds is a research economist with the Federal Reserve Bank of Atlanta.