Athanasios Orphanides on Real-Time Monetary Rules and their Impact on the Fed’s Framework Review
Macro Musings with David Beckworth
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Navigating Economic Indicators in Real-Time
This chapter explores the complexities of measuring key economic indicators like R-star and U-star, emphasizing the historical insights that inform current monetary policies. It discusses the importance of adopting simple monetary policy rules to mitigate the risks of misestimating natural rates, which can lead to inflation. The chapter advocates for a forecast-based policy approach focused on nominal GDP growth, providing a contrast to traditional methods and highlighting the implications for effective monetary policy.
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