4, part 2 (November 2000): 1007–35; Miles Kimball, “How and Why to Eliminate the Zero Lower Bound: A Reader’s Guide,” Confessions of a Supply-Side Liberal blog, September 20, 2013. BIS central bankers’ speeches  privacy. If these aren’t enough however, let me suggest another, very important benefit of currency that I explored in a paper with Charles Kahn and William Roberds. 3 The anonymity afforded by currency transactions prevents a buyer from suffering from any actions taken after the transactions that could exploit the knowledge gained by the seller of the buyer’s identity. For example, identity theft, or theft of credit or debit card information, is avoided through the use of currency. This is an economic benefit that is distinct from valuing privacy from a civil liberties point of view. If currency cannot be used in transactions, buyers are at a disadvantage, and many otherwise beneficial transactions (not related to buyers seeking to engage in tax evasion or otherwise illicit activity) would not take place. It is important to consider whether the move to eliminate currency, or to alter radically how currency works, represents a degradation or an improvement in technology. Should society voluntarily abandon a widely used technology that has enormous benefits and features that are currently irreplaceable, such as the privacy that comes with an untraceable transaction? While some of those features are used by criminals to facilitate socially destructive activities, the vast majority of currency uses are legal and productive.
James McAndrews: Negative nominal central bank policy rates – where is the lower bound? Remarks by Mr James McAndrews, Executive Vice President and Director of Research of the Federal Reserve Bank of New York, at the University of Wisconsin, Madison, 8 May 2015. *  *  *  The views expressed in this speech are those of the author and do not necessarily reflect the views of the Federal Reserve Bank of New York or of the Federal Reserve System. The Swiss National Bank (SNB), the European Central Bank (ECB), Danmarks Nationalbank (DNB), and the Swedish Riksbank recently have pushed short-term interest rates to levels below the “zero lower bound.” The current extent and depth of negative policy rates is unprecedented; previously only Denmark had a modestly negative policy rate in 2012 through 2014. The actions of the four central banks have led a number of commentators to ask, Is the concept of a zero lower bound on interest rates valid? If not, what might be the lower bound, if any, on nominal interest rates? Indeed, some economists have suggested that with changes to the monetary system, we could in fact eliminate the lower bound to interest rates altogether. I’ll first review the reasons given by the central banks for setting negative policy rates – in all cases, the negative rates were seen as a means of advancing the banks’ macroeconomic objectives in the current environment.