Asymmetry in Monetary Policy Effectiveness Against Inflation vs. Deflation

The Need for Negative Real Interest Rates in a Deep Recession

Argument for Raising Inflation Targets to Mitigate ZLB Risks

A central bank is attempting to combat a severe recession by setting its nominal policy interest rate to -0.5%. Which of the following best explains why this policy is likely to be ineffective at stimulating the economy?

Monetary Policy Limitations in a Downturn

If an economy is experiencing a 2% annual rate of deflation (a sustained fall in the general price level), a central bank's policy of setting the nominal interest rate to 0% will successfully create a negative real interest rate to stimulate spending.

The Floor on Policy Interest Rates

The Real Interest Rate Floor at the Zero Lower Bound

Insufficiency of Conventional Monetary Policy After the 2007-2009 Crisis