In the final section, we briefly discuss the macroeconomic costs and benefits of very low interest rates, an issue that bears on the question of whether the central bank should take the policy rate all the way to zero before undertaking some of the alternatives we describe. I.
Shaping Interest-Rate Expectations  The pricing of long-lived assets, such as long-term bonds and equities, depends on the entire expected future path of short-term interest rates as well as on the current short-term rate. Prices and yields of long-lived assets are important determinants of economic behavior because they affect incentives to spend, save, and invest.