My wife is a professor of nursing, and she says one of the best things you can do for your children is to get them vaccinated. It’s better to deal with the short-term pain of a shot than to take the risk that they’ll contract a disease later on. I think about monetary policy near the zero lower bound—or ZLB for short—in much the same way. It’s better to take preventative measures than to wait for disaster to unfold. Today I’m going to talk about three things: first, the heightened relevance of the ZLB for monetary policy; second, the strategies designed to mitigate the effects of the ZLB in an economic downturn; and ... (full story)