Policy Rules Consistent with the FOMC’s Longer-Run Goals and Monetary Policy Strategy
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David H. Papell
und
Ruxandra Prodan
Abstract
The Federal Open Market Committee’s revised Statement on Longer-Run Goals and Monetary Policy Strategy implements flexible average inflation targeting and mitigates shortfalls, rather than deviations, of employment from its maximum level. We show how the Taylor, balanced approach, and balanced approach (shortfalls) rules in the Monetary Policy Report could be modified to be consistent with the revised statement. Federal funds rate prescriptions from the consistent rules are both closer to the liftoff from the effective lower bound in December 2015 and provide a better fit to the actual federal funds rate than the rules currently included in the Report. The prescriptions from the balanced approach rules are closer to the liftoff and provide a better fit than the prescriptions from the Taylor rules.
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Artikel in diesem Heft
- Frontmatter
- Editorial
- The Economists’ Voice, December Issue 2022, Editorial
- Policy Papers
- Sanctions are Costly for Citizens but Beneficial for Autocrats: A Political-Economic Perspective
- The New Advocacy for Autarky: Self-Sufficiency is Now Once Again Becoming Popular for Geopolitical Reasons
- Policy Rules Consistent with the FOMC’s Longer-Run Goals and Monetary Policy Strategy
- Monetary Policy Normalization and Central Bank Profits: A Break-Even Point Perspective
- Does Financial Dominance Explain the Recent Rise in Inflation?
- The Influence of Economic Freedom on the Shadow Economy in Developed and Developing Countries
- Policy Forum
- EU Green Taxonomy Data – A First Vendor Survey
- EU Taxonomy: Mission Impossible
- Will the EU Taxonomy Impact the Trade Specialisation of European Economies?
- Green Finance and the EU-Taxonomy for Sustainable Activities: Why Using More Direct Environmental Policy Tools Is Preferable
- EU Taxonomy and ECB Monetary Policy: Moving Towards Centrally-Directed Green Capital Allocation?
- The EU Taxonomy’s (Potential) Effects on the Banking Sector and Bank Lending to Firms
