How quickly should the United States tighten monetary policy and exit from quantitative easing? Is the neutral real interest rate lower than before the crisis? Should we raise inflation targets? What can we learn from the unconventional policies that emerging markets adopted during the crisis? Are we entering an environment of global deflation? And if so, can the existing central bank toolkit stave off that threat?
Seven years after the crisis, the effects of unconventional monetary policies continue to be a matter of debate. There is little consensus not only about the effectiveness of these policies in promoting aggregate demand, but also about possible unintended side effects on financial stability.