But obviously the Fed is constrained once nominal rates hit zero, and so the economy returns to its trend growth rate but never recovers the ground lost during the financial shock.

If real dividends barely grow over the long term, then a forecast of stagnant nominal dividends may simply reflect investors' expectations of zero inflation.

The most important issue, of which the Fed is keenly aware, involves the exit strategy for avoiding inflation once the economy has improved and short-term nominal interest rates are no longer zero.