Economics at your fingertips  

Policy Rules Consistent with the FOMC’s Longer-Run Goals and Monetary Policy Strategy

Papell David H. () and Prodan Ruxandra ()
Additional contact information
Prodan Ruxandra: Department of Economics, University of Houston, Houston, USA

The Economists' Voice, 2022, vol. 19, issue 2, 125-138

Abstract: The Federal Open Market Committee’s revised Statement on Longer-Run Goals and Monetary Policy Strategy implements flexible average inflation targeting and mitigates shortfalls, rather than deviations, of employment from its maximum level. We show how the Taylor, balanced approach, and balanced approach (shortfalls) rules in the Monetary Policy Report could be modified to be consistent with the revised statement. Federal funds rate prescriptions from the consistent rules are both closer to the liftoff from the effective lower bound in December 2015 and provide a better fit to the actual federal funds rate than the rules currently included in the Report. The prescriptions from the balanced approach rules are closer to the liftoff and provide a better fit than the prescriptions from the Taylor rules.

Keywords: policy rules; forward guidance; monetary policy; federal reserve board; federal open market committee; federal funds rate (search for similar items in EconPapers)
JEL-codes: E5 E52 E58 (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link) (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from

DOI: 10.1515/ev-2022-0010

Access Statistics for this article

The Economists' Voice is currently edited by Michael Cragg, Dwight Jaffee and Joseph Stiglitz

More articles in The Economists' Voice from De Gruyter
Bibliographic data for series maintained by Peter Golla ().

Page updated 2023-02-06
Handle: RePEc:bpj:evoice:v:19:y:2022:i:2:p:125-138:n:13