Tony Yates would have central banks insist on a failed strategy:
The practical challenges of devising watertight legal reform to eliminate cash and its near substitutes, both currently invented and yet to be, or to reform them so that a variable negative interest rate can be set, seem like a tall order.
Much easier is simply to raise the inflation target, as suggested previously by Olivier Blanchard, Krugman and others. Perhaps by 2 percentage points. To be done when interest rates would otherwise – under the old target – lifted clear enough of the zero bound that the new target can be achieved within a realistic time frame. And perhaps reviewed at low frequency as evidence on changes in the natural rate accumulates.
And to conclude with a rather woolly argument, though felt keenly myself, higher inflation would be a much easier thing to explain and communicate than innovative, invasive reform of monetary institutions that not all on the econosphere grasp readily. And being more easily communicable, I conjecture that it would be easier to build a lasting constituency for higher but stable inflation.
A Price-Level-Target or, even better, a Nominal GDP Level Target would do a much better job of avoiding the ZLB. Just imagine the hardship after decades telling people inflation is bad and of central banks targeting low (2%) inflation that they should now accept that higher (4%) inflation is the best way to go!
Central Banks should forget inflation and concentrate instead on providing Nominal Stability in the guise of a stable nominal GDP level target path, much as in fact was obtained for 20 years during Greenspan´s Chairmanship of the Fed.