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In some Euro Zone countries, both the nominal and real interest rate has become negative. Using a numerical example, distinguish between nominal and real interest rates.Explain how negative interest rates might impact on two macroeconomic objectives. Here is a short video providing an answer to this question.
Gillian Tett: There is a downside to negative interest rates — and it's all psychological. People feel so anxious when this happens that the fear ends up undermining the benefits of cheaper loans. https://t.co/cBGDjc2NU1
— Financial Times (@FinancialTimes) October 9, 2019
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