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Should the Fed regularly evaluate its monetary policy framework?

Author

Listed:
  • Jeffrey C. Fuhrer
  • Giovanni P. Olivei
  • Eric S. Rosengren
  • Geoffrey M. B. Tootell

Abstract

Would a more open and regular evaluation of the monetary policy framework improve policy in the United States? Even when considering a relatively short timeframe that spans the 1960s to the present, it is possible to point to many significant changes to the framework. Some of the changes were precipitated by acute economic conditions, while others were considered and implemented only gradually as a response to long-standing problems with the framework. But the process for evaluating and changing frameworks to date has not always been transparent, and changes have not always been timely. Could a more formal, and open, review improve how well we adhere to our current framework? Could transitions to a new framework be made more effectively? We conclude that such a review might indeed be beneficial, and outline one possible review process.

Suggested Citation

  • Jeffrey C. Fuhrer & Giovanni P. Olivei & Eric S. Rosengren & Geoffrey M. B. Tootell, 2018. "Should the Fed regularly evaluate its monetary policy framework?," Working Papers 18-8, Federal Reserve Bank of Boston, revised 01 Oct 2018.
  • Handle: RePEc:fip:fedbwp:18-8
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    References listed on IDEAS

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    Cited by:

    1. Janice C. Eberly & James H. Stock & Jonathan H. Wright, 2019. "The Federal Reserve’s Current Framework for Monetary Policy: A Review and Assessment," NBER Working Papers 26002, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    policy rules; monetary policy framework; the evolution of monetary policy; FOMC;

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination

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