David Papell on the History, Motivations, and Current Applications of Monetary Policy Rules
Macro Musings with David Beckworth
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Inertial and Non-Inertial Rules in Monetary Policy
This chapter discusses the difference between inertial and non-inertial rules in monetary policy, focusing on the gradual changes in normal times and the quicker rate changes during unusual times like financial crises and pandemics. It also explores the evaluation of policy rules using real-time data and forecasts from the Federal Reserve, discussing the consistency between different rules and the impact on monetary policy. The chapter further analyzes the concept of being 'behind the curve' and provides advice to the Federal Open Market Committee (FOMC) regarding policy rules.
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