Zero rates preferable to negative rates for investors’ risk-taking -Ben-Gurion U study

In several lab experiments, the researchers demonstrated that a zero-interest rate policy has the strongest impact on individuals’ investment decisions driving their decisions to borrow money and the percentage of risky assets in their portfolios. Specifically, dropping the interest rate below zero, a negative interest rate policy, is less effective in terms of increasing leverage and shifting individuals’ allocations to risky assets.