UPDATE MAY 19, 2014: Here is a link to the most recent version of “Breaking Through the Zero Lower Bound”—the version I presented at the European Central Bank on July 7, 2014, the Bundesbank the next day, Banca d’Italia on July 11 and the Swiss National Bank US Department of the Treasury on July 15, 2014.
June 17, 2013: I went to the Bank of England to talk about how to eliminate the zero lower bound back in May. Tomorrow I will give this presentation (download) at the Bank of Japan:
I think my online readers will also find it interesting. It includes arguments that I have not made online yet in any detail.
The associated paper is very preliminary (in particular, it has very long quotations about the history of thought that need to be cut down to size, and needs to be revised along the lines of the Powerpoint file), but here is the current draft of the paper “Breaking Through the Zero Lower Bound” (download).
Update, June 29, 2013: My electronic money presentations on June 18 at the Bank of Japan, June 21 at Keio University and June 24 at Japan’s Ministry of Finance were well-received. The fact of my seminar makes the part of the International Herald Tribune’s summary of Leika Kihara’s (gated) article "Japan policy appears set, like it or not" that I have italicized false:
The central bank is said to have no new stimulus plan in the works, nor is it pondering alternative measures.
Though I argue in my presentation that an electronic yen policy is superior to the massive quantitative easing that I advocated for Japan on June 29, 2012, because an electronic yen allows monetary policy to steer the economy without inflation, some version of an electronic yen is also the plausible fall-back policy if massive quantitative easing does not work.
For the record, the type of quantitative easing I advocated for Japan involved massive purchases of corporate stocks and bonds—”assets chosen to have nominal interest rates as far as possible above zero.” Purchases of corporate stocks and bonds should be much more powerful than purchases of Japanese government bonds. Though the Bank of Japan has the legal authority to purchases corporate stocks and bonds, there is a concern (perhaps misplaced) about the possible consequences of the risk for the Bank of Japan’s net worth. An alternative would be for Japan to push further in increasing the risky asset holdings in the Government Pension Investment Fund. That would be in line with what I write in my column "Why the US Needs Its Own Sovereign Wealth Fund."
Update, August 31, 2013: I am headed to give this presentation at the University of Copenhagen on September 5, 2013, at Denmark’s central bank on September 6, at Ecole Polytechnique in Paris on September 10, at the University of Paris on September 12, and at the Banque de France on September 13. I am also scheduled to give this presentation at the Federal Reserve Board on November 1, 2013.
Update, June 10, 2013:
I gave this seminar at the US Treasury on May 19, 2014. The rest of the itinerary for my 2014 electronic money tour so far is
- July 7: ECB
- July 8: Bundesbank
- July 11: Bank of Italy
- July 15: Swiss National Bank