Central banks in the world are increasingly experimenting with unconventional monetary policies. ...

Two types of unconventional monetary policies are quantitative easing (QE), and negative nominal interest rates. It was typically thought that the zero lower bound (nominal interest rate at zero) was a constraint on monetary policy, and once the central bank had lowered the nominal interest rate to zero, there was nowhere to go but up. In this circumstance, there is another possibility, which is that the central bank could engage in large scale asset purchase — QE, the purchase of long-maturity government debt, or other assets. The theory is that this might increase the effective aggregate stock of liquidity. Another possibility is the zero is not the lower bound on the nominal interest rate — there is an effective lower bound less than zero. If that is true, then nominal interest rates can go below zero. These unconventional policies are in their experimental stages, so there is no firm evidence that they actually work as advertised.