No central bank in the world follows a mechanical, mathematical rule, and I think it would be a terrible mistake to ask the Federal Reserve to specify a mathematical rule
If that's what you mean by your rule, a gold standard, a currency board, yes, that has happened, but given the goals that Congress has assigned to us with respect to inflation and employment, I'm not aware of any -- for example, an inflation- targeting country, of which there are many, that has a mathematical rule.
Nevertheless, it makes perfect sense to behave in a relatively systematic way, looking -- when you have objectives, asking the question, how far are you from achieving those objectives and how fast do you expect progress to be made in determining whether or not -- exactly how much accommodation is needed?
And a number of different factors come into play at different times. If we were following a specific mathematical rule, I really think performance in this recovery would have been dreadful. Most of the rules we would have used, first of all, we couldn't have followed in the depths of the downturn. They would have called for negative interest rates. And if we had tightened monetary policies, as some of those rules would have called for -- given the headwinds we face, the recovery would not be as far advanced as it is.
So there are special factors and structural changes that need to be taken into account that would make me very disinclined to follow a mathematical rule, but I think it is important that a central bank behave in a systematic and predictable way and to explain what it's doing and how it sees itself as likely to respond to future economic developments as they unfold. And that is precisely what we're trying to do with our forward guidance.