"To the extent that there is a relationship between economic slack more broadly, and I mean not just labor market conditions, but capital and product market conditions as well, it's become a much weaker relationship. That is, the relationship between slack and slower inflation is clearly lower than it used to be. So that connection is much weaker and there are other factors that seem to play an important role.''
``The other problem with using this natural rate concept actively is that a lot of research, some of it at the Federal Reserve Board, has shown that in real time we have a really hard time determining what the natural rate is, if such a thing exists.
``And in particular, with demographic changes, changes in the labor market, all kinds of other things, you wouldn't expect a measure of slack to be constant. So what we do at the Federal Reserve is, we really have to be very eclectic.''
``We don't rely on any single indicator, on any single measure. We look at a wide variety of indicators.''
``The economy is just too complicated now to rely on any single indicator.''
From the audience Q and A session, as reported by Bloomberg News