Commentary on Policy at the Zero Lower Bound

Several aspects of the difficulties of policy at the zero lower bound are discussed: The difficulty of credible commitment to higher future inflation, as most New Keynesian models imply is necessary; the need for fiscal and monetary policy coordination; and the pitfalls in the taking of quasi-fiscal actions by the central bank.

Authors

• Christopher A. Sims

JEL codes

• E63
• E58
• E52