Working Paper: Do firms behave differently when nominal interest rates are below zero?

Working Paper - November 2020 - No. 164

Authors Abildgren, Kim; Kuchler, Andreas
Subject Monetary-policy transmission; Economic activity and employment
Type Working paper
Year 2020
Published 19 November 2020
Denmark was the first country in the world to move its key monetary policy rate below zero. Using rich microdata and an event study framework, we find that firms exposed to negative deposit rates to a higher degree than other firms increase their fixed investments and employment.