deleterious effects of the lower bound on the economy. Two key themes emerge from our analysis. First, the central bank can … at the target level and further reduce the effects of the lower bound on the economy. …

which the economy undergoes structural change and where private agents and the central bank possess imperfect knowledge … about the true structure of the economy. Policymakers follow an interest rate rule aiming to maintain price stability and to … minimize fluctuations of unemployment around its natural rate but are uncertain about the economy’s natural rates of interest …