The FED’s Strategy on a Targets-based Monetary Policy Framework

Florian Gerth and Yiyang Bian
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Florian Gerth: Asian Institute of Management, Makati, Manila, Philippines
Yiyang Bian: Faculty of Business, University of Wollongong in Dubai, Dubai, UAE

Financial Economics Letters, 2023, vol. 2, issue 1, 22-29

Abstract: Major economic and financial contractions usually go hand-in-hand with muted inflation. This has been true for the Great Depression, the Global Financial Crisis, as well as the Covid-19 crisis. In this paper, we theoretically highlight and discuss the evolution of instruments and approaches monetary-policy decision makers at the Federal Reserve have in lifting inflation to desired levels in times of the zero-lower bound, paying particular focus on more rigorous developments like asymmetric average inflation and temporary price-level targeting.

Keywords: Monetary Policy; Inflation Targeting; Zero Lower Bound; Alternative Monetary Policy Frameworks (search for similar items in EconPapers)
Date: 2023
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