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Do negative ECB interest rates lead to higher saving?

We disagree with recent suggestions that negative central bank policy rates encourage households to increase their savings, thereby reducing demand and weighing on inflation. In fact, the opposite seems to be true in the euro-zone. We suspect that concerns about banks will prevent further rate cuts. But we still think that the ECB will extend its QE programme, which would push down long-term interest rates and give the economy a boost.


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