Transcripts of the monetary policymaking body of the Federal Reserve from 2002–2008.

Well, whatever that lower bound is, I have a question that’s kind of hypothetical. I wasn’t a member of the Committee five years ago. My understanding, though, is that much thought was given to how we would conduct monetary policy if we needed to reduce the nominal federal funds rate to zero or its effective equivalent. My understanding is that the general conclusion—and my understanding is that this is mainstream economists’ general view as well—is that the way we would do that would be to expand the monetary base, perhaps by buying assets outside the normal range of assets that we would buy. Now, the first question is, Is that correct? Then I have a follow-up.

Keyboard shortcuts

j previous speech k next speech