Do interest rates really stop at zero?

It is widely accepted that there is a 'zero bound' on interest rates and that this is a limit on the tool of monetary policy. But is this actually the case? Denmark's central bank has cut deposit rates to minus 0.2% and there are suggestions that other Scandinavian countries may follow suit. If they can do it, why can't others? If the rate can be minus 0.2%, why can't it be minus 2%? Such an outcome would certainly throw some basic assumptions on their head. I would be re-thinking my comment in a recent article that there is more downside...

It is widely accepted that there is a 'zero bound' on interest rates and that this is a limit on the tool of monetary policy. But is this actually the case?

Denmark's central bank has cut deposit rates to minus 0.2% and there are suggestions that other Scandinavian countries may follow suit. If they can do it, why can't others? If the rate can be minus 0.2%, why can't it be minus 2%?

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