### One Response to *Can the natural rate of interest be negative?*

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You ask whether agents can value the future more than the present (in other words, can time preferences and the natural rate be negative?). Of course they can, but you need to start by redefining time preferences. Time Preference is not an exogenous input into the Euler Equation of consumption. As the utility of consumption is a function of incomes, time preference is endogenously determined by income expectations. When agents expect negative income growth, consumption in the Future becomes more valuable than consumption the present hence you get negative time preferences. In other words, savings money for a rainy day.

As to what happens at ZLB, you may find this post interesting:

http://tinyurl.com/oulszvp