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The Frontiers of Society, Science and Technology, 2022, 4(10); doi: 10.25236/FSST.2022.041012.

Transmission Channel and Effect Analysis of Denmark's Nominal Negative Interest Rate Policy


Lisha Zuo1,2

Corresponding Author:
Lisha Zuo

1Institute of Finance, Jiangxi University of Finance and Economics, Nanchang, 330000, China

2Institute of Economics and Management, East China Jiaotong University, Nanchang, 330000, China


Denmark is considered to be the most successful example of implementing a nominal negative interest rate policy(NIRP). This paper examines the transmission and effects of the NIRP in Denmark through a TVP-SV-VAR model. The results show that the exchange rate channel of the NIRP in Denmark is effective while the NIRP increases exports and effectively promotes economic growth through Danish krone’s depreciation. And the interest rate channel, the wealth channel and the asset portfolio channel plays a limited role. Denmark's NIRP is effective as it aims to ease the pressure of exchange rate appreciation.


Denmark's NIRP, Transmission channels, Transmission effect, TVP-SV-VAR

Cite This Paper

Lisha Zuo. Transmission Channel and Effect Analysis of Denmark's Nominal Negative Interest Rate Policy. The Frontiers of Society, Science and Technology (2022) Vol. 4, Issue 10: 69-79. https://doi.org/10.25236/FSST.2022.041012.


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