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Good explanation. Also wrong. Denmark has a negative interest rate [1] but has had a (positive) inflation for a while [2]. [1] https://en.wikipedia.org/wiki/L

by tomp 7y ago

Good explanation. Also wrong. Denmark has a negative interest rate [1] but has had a (positive) inflation for a while [2]. [1] https://en.wikipedia.org/wiki/List_of_countries_by_central_bank_interest_rates https://en.wikipedia.org/wiki/List_of_countries_by_central_b... [2] https://data.worldbank.org/indicator/FP.CPI.TOTL.ZG?locations=DK https://data.worldbank.org/indicator/FP.CPI.TOTL.ZG?location...

dnadler 7y ago
This doesn't mean that the OP was wrong, but that the negative interest rate policy successfully prevented deflation.
- chewz 7y ago
  Denmark does not use euro and their NIRP had more to do with keeping parity of krona to euro then fighting deflation.
  - qeternity 7y ago
    You say this like trade imbalances (driven by FX) have no bearing on inflation...it’s the same side of the coin.
qeternity 7y ago
I said battling deflation. I didn’t say undergoing. The reason you have negative rates are specifically to avoid deflation. It’s like you didn’t even read what I wrote. But thanks for the smug, and wrong, response.