wricaplogo

Evans, Charles L. on 2017 November 14 at 03:00

My aim today is not to argue for state-contingent price-level targeting… That may be a good way to go, but at this point, I just don't know. My point is that we should be planning for these inevitable future situations today.

Evans championed [price-level targeting] policy in 2010 to deal with sagging inflation, but ultimately the Fed rejected such an "extreme" idea as too difficult to undertake during an economic crisis, Evans said on Tuesday. Now that economic times are calmer, Evans said, the Fed can study and analyze this and other approaches, and prepare the public for their possible use in the next severe downturn if the Fed cuts rates to zero and still needs more firepower to get the economy growing again. Bouts of zero interest rates are likely to become more common in the future as potential economic growth slows, Evans and other Fed policymakers believe. … "My aim today is not to argue for state-contingent price-level targeting," Evans said on Tuesday. "That may be a good way to go, but at this point, I just don't know. My point is that we should be planning for these inevitable future situations today." Evans, Charles L.

More From:

See Also: