, see, for example, https : / / www. federalreserve. gov / monetarypolicy / bst _ openmarketops. htm and https : / / www. federalreserve. gov / monetarypolicy / expiredtools. htm. - 8traditional interest rate tool. in any case, we have a responsibility to thoroughly evaluate what mix of these tools is likely to work best when the next elb episode arrives. perhaps it is time to retire the term “ unconventional ” when referring to tools that were used in the crisis. we know that tools like these are likely to be needed in some form in future elb spells, which we hope will be rare. we now have a significant body of evidence regarding the effectiveness, costs, and risks of these tools, including those used by the fomc and others tried elsewhere. our plans must take advantage of this growing understanding as assessments are refined. the third question concerns improving communication, which i discussed earlier from the standpoint of governance and accountability. but transparency also plays a central role in policy effectiveness through its effects on the expectations of households and businesses. of course, this was the major insight behind the transparency revolution in central banking over the past few decades. today, central banks publicly share a large and ever - increasing amount of information about policy. but policymakers and commentators inside and outside central banks sometimes question whether all of the transparency adds up to effective communication. 14 the fomc ’ s famous dot plot is one example. a focus on the median forecast amounts to emphasizing what the typical fomc participant would do if things go as expected. but we have been living in times characterized by large, frequent, unexpected changes in the underlying structure of the economy. 15 in this environment, the most a 2016 brookings conference titled “ understanding fedspeak ” ( see https : / / www. brookings. edu / events / understanding - fedspeak ) raised several aspects of this issue. for example, olson and wessel ( 2016a ) presented results of a survey of those who follow the fed closely ; in an op - ed ( 2016b ), they noted that “ some 73 percent of academics said fed communications helps the markets ; only 44 percent of private - sector fed watchers agreed. ” for more on changes in the underlying structure of the economy, see powell ( 2018 ). - 9important policy message may be about how the central bank will

was beginning to show that — in models, at least — such strategies could substantially reduce the unemployment and other costs of elb spells. 8 the simplest version goes like this : suppose that a spell with interest rates near the elb leads to a persistent shortfall of inflation relative to the central bank ’ s goal. but what if the central bank promised credibly that it would deliberately make up for any lost inflation by stimulating the economy and temporarily pushing inflation modestly above the target? in the models, the prospect of future stimulus promotes anticipatory consumption and investment that could greatly reduce the pain of being at the elb. 9 policymakers discussed this reasoning in the wake of the crisis, but neither the fed nor any other major central bank chose to pursue such a policy. 10 why? for makeup strategies to work, households and businesses must go out on a limb, so to speak, raising spending in the midst of a downturn. in theory, they would do this based on their confidence that the central bank will deliver the makeup stimulus at some point — perhaps years in the future. in models, great confidence in central bankers is achieved by assumption. despite the flattering nature of this see reifschneider and williams ( 2000 ) and references therein. for a more recent review of this subject, see bernanke, kiley, and roberts ( 2019 ) and mertens and williams ( 2019 ). eggertsson and woodford ( 2003 ), for example, show that optimal policy at the elb entails a commitment to reflate the price level during subsequent economic expansions. see also wolman ( 2005 ) for a discussion of the effectiveness of price - level targeting at the elb. for a discussion of the relationship between pricelevel targeting and average - inflation targeting, see nessen and vestin ( 2005 ). the strategy in reifschneider and williams ( 2000 ), for instance, involves a central bank following a taylor rule modified to make up for shortfalls in policy accommodation during elb episodes. kiley and roberts ( 2017 ) study a strategy in which policymakers aim for inflation higher than 2 percent during normal times to compensate for below - target inflation during elb episodes. also see bernanke ( 2017 ) for a strategy in which low inflation is made up if it occurs when the federal funds rate is at or near the elb. see also bernanke, kiley, and roberts ( 2019 ) and mer