Discretionary monetary policy without considering the zero lower bound on interest rates leads to significant economic losses. A study using a model of the U.S. economy shows that when interest rates are low, output decreases and deflation occurs under discretionary policy. These negative effects are much worse compared to when there is policy commitment. The losses increase further when inflation is influenced by past inflation rates. This happens because private sector expectations and policy decisions interact to reach the lower bound on interest rates sooner.