But it did not work in the 1990s for Japan, why would it work better a second time?
The zero lower bound problem refers to a situation in which the short-term nominal interest rate is zero, or just above zero, causing a liquidity trap and limiting the capacity that the central bank has to stimulate economic growth"
https://en.wikipedia.org/wiki/Zero_interest-rate_policy
I was reading the Wall Street Journal analysis recently, which agrees this won't help much, nothing that while it's designed to provoke investment "the gap between corporate cash flow and investment stands at a record 6% of GDP. If firms wanted to invest, they could go to their own vaults."
They recommend this measure only if combined with structural reform (especially labor reform), observing "Japan’s rigid labor system has led firms to refuse to hire more “regular” workers, whom they cannot lay off during slack times. Instead they hire “nonregulars”" and do not invest in training and human capital and doing little for these workers' futures. After that they suggest fiscal stimulus, but observing that past "fiscal stimulus" has been mostly handouts to inefficient farms in rural districts to buy votes they instead recommend measures like making public high schools free (!!) and getting sewage systems to the 40% of the population that doesn't have them (!!!).
The zero lower bound problem refers to a situation in which the short-term nominal interest rate is zero, or just above zero, causing a liquidity trap and limiting the capacity that the central bank has to stimulate economic growth" https://en.wikipedia.org/wiki/Zero_interest-rate_policy
http://www.thedailybell.com/exclusive-interviews/35987/Antho...