But it is critical to emphasize that history’s answer will depend also on future policies, monetary and other, notably including fiscal policy. What steps can be taken to mitigate the constraints associated with the ZLB? Against that backdrop, a second key question for central banks is, What steps, if any, can be taken to mitigate the constraints associated with the ZLB?
•  Raising the Inflation Target: One step that has been proposed by many, including Olivier Blanchard, is the possibility of raising the target rate of inflation from 2 percent to some higher level. One concern I have raised in the past about such proposals is that high levels of inflation may also be associated with higher inflation variability.