More specifically, should the size and composition of the central bank balance‐sheet be now thought as a conventional tool? Should the use of negative short‐term interest rates be exploited more systematically, and possibly facilitated, in reaction to deep recessions?
Should central banks exploit innovative transmission mechanisms, for example those suggesting that interest rates should be increased to jolt the economy away from an ultra‐low inflation trap? Size and composition of central bank balance sheets Traditionally, central banks used only short‐term interest rates to steer the economy.