For related discussions, see Reifschneider and Williams (2000); Adam and Billi (2007); Nakov (2008); and Hills, Nakata, and Schmidt (2016). 11 Eggertsson and Woodford (2003) provide an early discussion of how optimal monetary policy at the ELB entails a commitment to reflate the price level during the subsequent economic expansion. Nessén and Vestin (2005) discuss the relationship between average inflation targeting and price-level targeting.
In conclusion, the fact that the South African banking sector remains profitable and adequately capitalised is not a cause for complacency.