a more predictable
, less interventionist,
more rules-based monetary policy"
" strategy of the kind that has worked well
when tried
as in the 1980s,
1990s
and until recently "
what about recently johnny ?
never mind
janet yellen concurs..sort of
"Many studies have shown
in normal times, when the economy is buffeted by typical shocks
—not the extraordinary shock resulting from the financial crisis—
simple rules can come pretty close to approximating optimal policies.
In fact, empirical research suggests
a modified version of the original Taylor rule
fits the behavior of the Fed reasonably well
from the late 1980s until the financial crisis" !!!!!!!1
financial crisis ?
"why shouldn’t the FOMC adopt such a rule as a guidepost to policy? "
" The answer is that times are by no means normal now"
"the simple rules that perform well under ordinary circumstances
just won’t perform well with persistently strong headwinds restraining recovery"
" and with the federal funds rate constrained by the zero bound"
its those damn "head winds " eh ?
