11  Billi (2007) attempts to measure optimal inflation in a model that balances the costs of hitting the zero bound with the costs arising from the presence of nominal-price stickiness. Schmitt-Grohé and Uribe (2007) argue that the probability of the U.S. economy hitting the zero bound is very small.
12  This increased uncertainty was explicitly recognized by the Bank of Canada in its press releases and Monetary Policy Reports once the target overnight interest rate had reached its effective lower bound, since any additional easing would necessarily require the use of unconventional policy measures. See Bank of Canada, April 2009, Monetary Policy Report.