The zero lower bound on interest rates in the US made no material contribution to the lull in output in 2008, but played a role in slowing down economic activity, argues John Williams in a paper published by the San Francisco Federal Reserve in October.

Based on model simulations, Williams, the central bank's director of research, finds that additional rate cuts to the amount of 4% would have curbed the spike in unemployment, and helped bring inflation and unemployment rates to steady values