That is, as in Bernanke, Kiley, and Roberts (2019), the goal of monetary policy after lifting off from the ELB is to return inflation to its 2 percent longer-run goal, but not to push inflation below 2 percent. In other words, after liftoff from the ELB, monetary policy reverts to simple flexible inflation targeting (Bernanke, 2017b).
So when the crisis erupted, many countries had little resilience, and the need for consolidation soon became evident. Uncertainty about US fiscal policy is another risk factor. At a time with weak domestic demand and low confidence in the private sector, many countries are compelled to pursue tight fiscal policies due to large government deficits and debts.