Nominal and Real Interest Rates. In Japan in the 1990s interest rates were near zero on government bonds. Some economists said that it was still possible to stimulate investment by creating negative...

Nominal and Real Interest Rates. In Japan in the 1990s interest rates were near zero on government bonds. Some economists said that it was still possible to stimulate investment by creating negative real interest rates. If nominal rates could not fall below zero, explain how real interest rates could be made negative. (Hint: Think about inflation.)