Waiting has the further benefit of allowing conventional monetary policy to regain its footing.
Since interest rates are unable to fall below zero, however, conventional monetary policy was effectively muzzled.
As Japan's economy becomes more normal, it is natural to expect a more conventional monetary policy.
Like conventional monetary policy, quantitative easing also works through exchange rates.
It faces the same difficulty as conventional monetary policy does in spotting and popping bubbles.
Action at the short end, Mr Draghi argued, was closer to conventional monetary policy.
But the return to conventional monetary policy would deflate the asset bubble and reduce corporate profits.
Here's one way to think about the liquidity trap — a situation in which conventional monetary policy loses all traction.
Central bankers are also increasingly confident that their pneumatic balance-sheets will not interfere with conventional monetary policy.
Under these conditions, conventional monetary policy — just buying up short-term debt with newly created bank reserves — has no traction.
Conventional monetary policy operates by changing the supply of monetary base, which is a unique, uniquely liquid asset.
