Undoubtedly, other factors have been at work as well, including those temporary factors I mentioned earlier and some more lasting I have not discussed, such as worldwide deregulation and privatization, and the freeing-up of resources previously employed to produce military products that was brought about by the end of the cold war.
Assuming policymakers don’t like uncertainty, they become less aggressive with their policy instruments, because bolder use of policy adds to uncertainty about outcomes. However, some recent evidence (Arturo Estrella, Rick Mishkin, and Glenn Rudebusch) suggests that this type of uncertainty may have a relatively modest quantitative effect on the policy outcome.