The case against negative interest rates

The only way to ensure that 'new money' is put into circulation is to have the government spend it on building houses and upgrading infrastructure

As a biographer and aficionado of John Maynard Keynes, I am sometimes asked: "What would Keynes think about negative interest rates?"

It's a good question, one that recalls a passage in Keynes's General Theory in which he notes that if the government can't think of anything more sensible to do to cure unemployment (say, building houses), burying bottles filled with bank notes and digging them up again would be better than nothing. He probably would have said the same about negative interest rates: a desperate measure by governments that can think of nothing else to do.

Related: John Maynard Keynes died 70 years ago. We ignore his wisdom at our peril | Justin Talbot Zorn and Merle Lefkoff