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Identifier to cite or link to this item: https://hdl.handle.net/10086/13974

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Title
Overcoming the Zero Bound on Nominal Interest Rates: Gesell's Currency Carry Tax vs. Eisler's arallel Virtual Currency
Creator
Creator Name
Buiter, Wilem H. Buiter, Wilem H.
Affiliation
Affiliation Name
European Bank for Reconstruction and Development
Affiliation
Affiliation Name
Universiteit van Amsterdam
Editor
Contributor Name
社会科学における統計分析拠点構築 = Research Unit for Statistical Analysis in Social Sciences
Key Word
zero bound
deflation
carry tax on currency
parallel virtual currency
JEL
E31
E42
E52
E58
Abstract
Despite the zero lower bound on the short nominal interest rate in Japan having become a binding constraint, conventional monetary policy in Japan, in the form of generalised open market purchases of government securities of all maturities, has never been pushed to the limit where all outstanding government debt and all current and anticipated future government deficits are (or are confidently expected to be) monetised. Open market purchases of private securities can create serious governance problems. Two ways of overcoming the zero lower bound constraint have been proposed. The first is Gesell's carry tax on currency. The second is Eisler's proposal for the unbundling of the medium of exchange/means of payment function and the numeraire function of money through the creation of a parallel virtual currency. This raises the fundamental issue of who chooses or what determines the numeraire used in private wage and price contracts - an issue that is either not addressed in the literature or addressed incorrectly. On balance, Gesell's proposal appears to be the more robust of the two.
Description
Discussion of Mitsuhiro Fukao's "The Effects of 'Gesell ' (Currency) Taxes in Promoting Japan's Economic Recovery"
Publisher
Institute of Economic Research, Hitotsubashi University
Issued Date
2005-06
Language
English(eng)
Resource Type
technical report
Version Type
VoR
Is Part OfRelation -
Related Title
Hi-Stat Discussion paper series ; No. d05-96
Relation
Related Identifier
URI
  http://21coe.ier.hit-u.ac.jp/english/index.html
Number of Pages
22
Sponsorship
21世紀COEプログラム = 21st-Century COE Program
Appears in Collections
Hi-Stat Discussion paper series
URL
https://hdl.handle.net/10086/13974