I argued that, to the contrary, policy could still be effective near the lower bound. Now, with several years of experience with nontraditional policies both in the United States and in other advanced economies, we know more about how such policies work.
It seems clear, based on this experience, that such policies can be effective, and that, in their absence, the 2007–09 recession would have been deeper and the current recovery would have been slower than has actually occurred. As I have discussed today, it is also true that nontraditional policies are relatively more difficult to apply, at least given the present state of our knowledge.