Efficacy of monetary policy at the zero lower bound.
Fiscal packages tempered the aftermath of the 2008 financial crisis while central bankers alleviated threats to the global financial system with unconventional monetary policy, steering economies into calmer waters than might otherwise have been the case. However, today there is no quick restoration of robust and sustainable global growth in prospect, leaving policymakers questioning what succeeds monetary easing.
Further easing may be counterproductive if it is seen as a signal of continuing risk, inducing greater safe-haven flows.
High public debts will leave little scope for more fiscal stimulus.
Transparent processes for addressing the problems of excess capacity, debt restructuring and corruption are needed to restore confidence.
