There is debate (mainly among those familiar with monetary policy issues) about the wisdom of keeping or changing the 2 percent inflation target. This is likely to be a continuing conversation that’ll continue under the new Fed chair. Much of the discussion is from advocates of one or another alternative making their pitch.
On January 8, the Hutchins Center on Fiscal and Monetary Policy at Brookings brought advocates of several alternatives (including sticking with 2% target) together to present their case and to challenge the others. The discussants weighed in on whether and how the choice of a target might matter for the actual policy path and the results for the economy. Important aspects of the discussion focused on the effects of alternatives on the clarity of Fed communication and on setting expectations and on the process by which the legislature holds the Fed accountable for results. The debate was grounded in serious analysis, clarified some issues, created a baseline for what’s likely to be a continuing conversation and considered a process by which the Fed can address this important question.
Read John Taylor’s remarks about the event on his blog.
The options: Keep it, tweak it, or replace it
What difference does a monetary framework make? And to whom?
Next steps: Learning from the Bank of Canada
Agenda
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January 8
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Introduction
DownloadsDavid Wessel Director - The Hutchins Center on Fiscal and Monetary Policy, Senior Fellow - Economic Studies @davidmwessel -
Why it's time to re-think the 2 percent target
DownloadsLawrence H. Summers Charles W. Eliot University Professor and President Emeritus - Harvard University @LHSummers -
The options: Keep it, tweak it, or replace it
Moderator
Louise Sheiner The Robert S. Kerr Senior Fellow - Economic Studies, Policy Director - The Hutchins Center on Fiscal and Monetary Policy @lsheinerPanelist
Olivier Blanchard C. Fred Bergsten Senior Fellow - Peterson Institute for International Economics @ojblanchard1Jeff Frankel James W. Harpel Professor of Capital Formation and Growth - Harvard UniversityJohn C. Williams President and CEO - Federal Reserve Bank of San FranciscoRick Mishkin Professor - Columbia UniversityBen S. Bernanke Distinguished Senior Fellow - The Brookings Institution, Economic Studies @BenBernanke -
What difference does a monetary framework make? And to whom?
DownloadsJohn Taylor Mary and Robert Raymond Professor of Economics - Stanford UniversityKristin J. Forbes Jerome and Dorothy Lemelson Professor of Management, Professor of Global Economics and Management - MIT-Sloan School of ManagementPeter Hooper Managing Director, Chief Economist - Deutsche Bank Securities -
Next steps: Learning from the Bank of Canada
John David Murray Former Deputy Governor - Bank of Canada
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