Conclusion My very brief review of these three proposals has tried to show how a combined IO-finance perspective can contribute to the policymaking process and what priorities for research might be. For the proposal to reenact Glass-Steagall, that perspective suggested the potential for considerable social costs.
Since nominal interest rates, which can be controlled by the central bank, never fall below zero, room for further monetary easing would be limited if conditions worsened. In this regard, there is an argument that it is better to have a positive rate of inflation as a cushion so that the central bank can maintain room for maneuvering when a policy response is needed.