However, though I would support a generally accommodative monetary policy today, I have raised questions regarding the advisability of keeping the emergency monetary policy in place for 32 months with the promise of keeping it there for an extended period. I have several concerns with zero rates. First, a guarantee of zero rates affects the allocation of resources.
It is generally accepted that no good, service or transaction trades efficiently at the price of zero. Credit is no exception. Rather, a zero-rate policy increases the risk of misallocating real resources, creating a new set of imbalances or possibly a new set of bubbles. For example, in the Tenth Federal Reserve District, fertile farmland was selling for $ an acre two years ago.