The process used in monetary policy by central banks to incrementally reduce the nominal rate of interest until it reaches 0% below which it cannot be lowered. It is typically implemented at a time of declining economic growth as a measure to stimulate economic activity. Such policies have been used recently by Japan in the 1990's and the U.S. in 2009 - 2011 following severe economic downturns.

Related information about zero-bound interest rate:

Related information about zero-bound interest rate:

**Zero-Bound Interest Rate Definition | Investopedia**

The lowest percentage of owed principal that a central bank can set. In monetary policy, the use of a 0% nominal interest rate means that the central bank can no ...

**What is zero-bound interest rate? definition and meaning**

Definition of zero-bound interest rate: The process used in monetary policy by central banks to incrementally reduce the nominal rate of interest until it reaches ...

**Mild Deflation alongside the Zero-Bound Interest Rate (Japanese)**

Abstract. This publication is in Japanese. Neither an English translation of the publication nor an English abstract is available.

**Near zero bound interest rate policy and liquidity trap: a ...**

Near zero bound interest rate policy and liquidity trap: a cointegration analysis of the demand for money in the United States.

**PIMCO | Investment Outlook - Towards the Paranormal**

A new duality – credit and zero-bound interest rate risk – characterizes the financial .... This new duality – credit and zero-bound interest rate risk – is what ...

**Can Raising Interest Rates Spark a Robust Recovery? - EconoMonitor**

Feb 7, 2012 ... In other words a downward sloping IS curve (and an upward sloping LM curve) no longer holds true in a zero bound interest rate area.

**Negative Interest Rates by Gary North**

Sep 19, 2009 ... He was a generous man, as you have no doubt read. The liquidity trap produces something called the zero-bound interest rate condition.

**Bill Gross Blasts Interest Rate Policy for Killing Economic 'Abundance'**

Feb 21, 2012 ... Bill Gross said the zero-bound interest rate policies embraced by central banks including the Federal Reserve may end up killing as opposed to ...