Finding Normal: Natural Rates and Policy Prescriptions
Document Type
Blog Post
Publication Date
7-6-2015
Language
en-US
Abstract
Over the past several years, the Federal Open Market Committee’s longer-run forecasts of the short-term interest rate and unemployment rate have steadily declined. These forecasts reflect the Committee’s views about the levels of the policy interest rate and unemployment rate that will eventually prevail when the economy returns to normal. A simple monetary policy rule illustrates how the reductions in these forecasts can imply a lower projected path for the policy rate.
Recommended Citation
Mary C. Daly, Fernanda Nechio & Benjamin D. Pyle,
Finding Normal: Natural Rates and Policy Prescriptions
,
in
2015
FRBSF Economic Letters
(2015).
Available at:
https://scholarship.law.bu.edu/shorter_works/235
Publisher URL
https://www.frbsf.org/economic-research/publications/economic-letter/2015/july/monetary-policy-normalization-natural-rates/
