This paper considers whether issues regarding liquidity trap or zero lower bound phenomena substantially affect the case for inflation targeting, in comparison with other possible strategies for conducting monetary policy. It examines both theoretical and empirical issues and, in the latter case, ...

It is almost superfluous to begin by emphasizing that recent research in monetary policy analysis has featured a great deal of work concerning conditions for determinacy—that is, existence of a unique dynamically stable rational expectations equilibrium— under various specifications of policy behavior.1 ...