18 See Janet L. Yellen, “A Challenging Decade and a Question for the Future,” Herbert Stein Memorial Lecture,  National Economists Club, Washington, D.C., October 20, 2017. In a recent set of simulations using traditional monetary policy strategies based on simple policy rules, Federal Reserve Board economists estimate that the zero lower bound would bind with significantly higher frequencies than in previous analyses. See Michael T. Kiley and John M. Roberts, “Monetary Policy in a Low Interest Rate World,” Brookings Papers on Economic Activity Conference Drafts, Washington, D.C., March 23–24, 2017. 19 She acknowledged, however, that the simulations on which her analysis was based could overstate the FOMC’s  current ability to respond to a recession, given little scope to cut the federal funds rate and the possibility that stimulus associated with forward guidance and asset purchases could be reduced with long-term rates already quite low. See Janet L. Yellen, “ The Federal Reserve’s Monetary Policy Toolkit: Past, Present and Future,” opening remarks at the Federal Reserve Bank of Kansas City’s Economic Policy Symposium, Designing Resilient Monetary Policy Frameworks for the Future, Jackson Hole, Wyoming, August 26, 2016. 20 Most participants did not indicate support for using the balance sheet as an active tool in other situations or for  other purposes. See Minutes of the Federal Open Market Committee, November 1-2, 2016. 21 Some surveys of the numerous studies of central bank bond purchase programs include: Joseph E. Gagnon,  “Quantitative Easing: An Underappreciated Success,” Peterson Institution for International Economics Policy Brief, no.

PB16–4, April 2016; Saroj Bhattarai and Christopher Neely, “ A Survey of the Empirical Literature on U.S. Unconventional Monetary Policy,” Federal Reserve Bank of St. Louis Working Paper, no. 2016–021A, October 2016; and John C. Williams, “Monetary Policy at the Zero Lower Bound: Putting Theory into Practice,” Brookings Institution Hutchins Center Working Papers, January 2014. 22 Studies show a lower median effect for Japan. Gagnon hypothesizes this may be associated with Japan’s  much larger government bond market relative to GDP than the other countries studied, perhaps suggesting that asset purchase effects operate in proportion to the size of the targeted bond market rather than the size of the economy. 23 See Ben S. Bernanke, “Monetary Policy in a New Era,” presented at the Peterson Institute for International  Economics conference, Rethinking Macroeconomic Policy, Washington, D.C., October 12, 2017. Bernanke argues, however, that deploying unconventional tools may not be sufficient in addressing a sharp downturn, and that changes in a central bank’s monetary policy framework may improve a central bank’s effectiveness in defeating the zero lower bound. 24 In addition, asset purchase programs may actively promote liquidity and improve market functioning during  periods of financial market stress, as was the case with the Fed’s first LSAP program, initiated at the height of 11 / 13  BIS central bankers' speeches  the crisis. In turbulent market conditions, the central bank’s willingness to purchase particular classes of assets can boost confidence and lower liquidity premiums that investors would require to hold otherwise illiquid securities.