While central banks have cut interest rate to levels unprecedented in recent monetary history, the outlook for economic activity remains weak. To further support the economy, many central banks have adopted non-standard monetary policy measures.
To my mind, these are arguably less effective than interest rates changes and more difficult to calibrate in light of central banks’ very limited experience using them.13 Thus, it seems plausible that the ability of monetary policy to control demand at the zero lower bound is now lower than previously.