Discussion paper

DP16016 Negative Interest Rate Policies: A Survey

This paper surveys studies on the impact of central bank negative interest rate policies (NIRP). It reviews recent research on the effects of NIRP on financial markets, banks, households, firms, and the macroeconomy. Overall, policy rate cuts when interest rates are negative propagate along the yield curve, with the first policy cut below zero contributing significantly to the fall in longer-term yields. Lending and deposit rates also decrease following the adoption of NIRP. Based on the experience so far, bank lending volumes have risen, and bank profits have not significantly deteriorated, although there is considerable heterogeneity in the effects. The impact of NIRP on inflation and output appears to be comparable to that of conventional interest rate cuts.


Brandao-Marques, L, M Casiraghi, G Gelos, G Kamber and R Meeks (2021), ‘DP16016 Negative Interest Rate Policies: A Survey‘, CEPR Discussion Paper No. 16016. CEPR Press, Paris & London. https://cepr.org/publications/dp16016