It May Be Time for the Fed to Go Negative (New York Times)
in order to encourage more spending. According to the professor, we may have to figure out a way to make holding money less attractive. His suggestions are:
- Pick a digit from 0 to 9, and announce that all currency with serial number ending with that digit will not be legal tender any more. Effective 10% negative return on holding the currency. (To be sure, it is his graduate student's idea, not his.)
- Produce significant enough inflation so that the real interest rate as measured by purchasing power becomes negative.
And here's hoping it's a delayed April Fools Day joke:
http://globaleconomicanalysis.blogspot.com/2009/04/time-for-mankiv-to-resign.html
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