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Firms facing negative deposit rates invest more and create more jobs

Summary:
Evidence from Denmark: The extent to which negative monetary policy interest rates stimulate the economy has a subject of recent discussion among academics and policymakers. Using new comprehensive Danish microdata, this column shows that firms exposed to negative deposit rates to a higher degree than other firms increase their fixed investments and employment – after due control for changes in the level of interest rates. These findings are suggestive of an additional monetary transmission channel operating as nominal interest rates cross zero and become negative. This entry was posted on December 1, 2020 at 3:14 pm and is filed under Academic research & research papers, Central Banks / Monetary Policy, Economics - macro,

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Evidence from Denmark:

Amol Agrawal
I am currently pursuing my PhD in economics. I have work-ex of nearly 10 years with most of those years spent figuring economic research in Mumbai’s financial sector.

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