Timeline for Why do people buy negative interest rate bonds?

Current License: CC BY-SA 4.0

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when toggle format	what		by	license	comment
S May 23, 2020 at 7:06	history	suggested	imbr	CC BY-SA 4.0	one zero missing
May 22, 2020 at 18:34	review	Suggested edits
S May 23, 2020 at 7:06
May 21, 2020 at 22:58	comment	added	curiousTrader		I see, it was just hard to imagine it from a household point of view. So with large sums, the interest on gov bond is higher than on bank deposit, even though both of them are negative. Thanks!
May 21, 2020 at 21:14	comment	added	1muflon1♦		@curiousTrader 1. it is not true that "real interest rate is always lower than nominal". in fact recently in US the estimated real interest rate was higher than nominal one as the picture in link from Mishkin textbook shows. Also, there are some other countries where that happened more often. uploads-cdn.omnicalculator.com/images/real_interest_rate/…. 2. if economy experiences negative interest rate bank deposit interest rate will be most likely negative as well as in NL now for any large sums (ABN amro applies them to deposits above 2,500,000e),
May 21, 2020 at 20:56	comment	added	curiousTrader		1: In reality the "healthy" economy has an inflation of around 3%. In a recession, (where interest rates can get negative) the economy slows down that is deflationary, but with money printing it's overall inflationary. So while in theory your calculation works, the real interest rate is always lower than nominal, so it still doesn't make sense for a household or anyone to buy negative yielding bonds. 2: I still don't get it why wouldn't it worth more for an individual to keep it as a deposit in a bank. In that way it's liquid, and has a low positive interest on deposit on it, which is better.
May 21, 2020 at 20:44	history	edited	1muflon1♦	CC BY-SA 4.0	added 1 character in body
May 21, 2020 at 20:37	history	answered	1muflon1♦	CC BY-SA 4.0