The big crazy experiment the Federal Reserve should have tried in 2008

Negative interest rates have been seen in the wild

Ben Bernanke
(Image credit: (Brendan Smialowski/Getty Images))

Ever heard of negative interest rates? In the economic world, they’re rather like Bigfoot or the Loch Ness monster; people theorize about their existence, but you never actually see them.

Yet, lo and behold, negative interest rates are cropping up across Europe: government bonds for Switzerland, Denmark, and Germany, along with bonds for corporations like Nestlé and Shell, have been sporting minus signs. That's sparked a discussion across the economic blogosphere about just how this could happen. We may have misunderstood the trade-offs between various forms of saving, how those trade-offs affect economic behavior, and thus whether negative interest rates can actually work.

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Jeff Spross

Jeff Spross was the economics and business correspondent at TheWeek.com. He was previously a reporter at ThinkProgress.