The idea of negative rates, that is, lending 100 and getting back say 95, may seem absurd “but remember this: Early mathematicians thought the idea of a negative number was absurd [too]”.2 In fact, the idea of negative interest rates, or “taxing money”, goes back to the late nineteenth century, to Silvio Gesell, the German founder of “Freiwirtschaft”.
The historic academic opinion on Gesell is divided. Irving Fisher supported him and John Maynard Keynes called him “a strange, unduly neglected prophet”, others a “typical monetary crank”.3 So where do we stand in the euro area?