Remark 1: The ZLB constraint has turned out to be more binding than previously thought. What was the pre-crisis consensus? As concerns the United States, let me quote from the paper entitled “Have We Underestimated the Likelihood and Severity of Zero Lower Bound Events?”, written by John Williams and co-authors working for the Board of Governors of the Federal Reserve System.
2 The paper documents predictions from the Fed’s FRB/US model (a large-scale macroeconometric model) for the frequency and duration of ZLB episodes.