by Christopher A. Sims
Department of Economics, Princeton University
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.
JEL Codes: E63, E58, and/or E52.
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