Can zero or negative interest rates cause low inflation?

We use the euro zone and Japan as examples. When zero or negative interest rates stimulate demand (by lowering debt interest payments and the cost of capital and by driving up asset prices) or curb supply (by keeping zombie firms alive), they help to raise inflation. But zero or negative interest rates can also lead to lower inflation if they: Lead to lower expected inflation (this is the neo-Fisherian mechanism); Weaken banks and reduce their capacity to finance the economy.