Don’t Assume it’s the Zero Rate Bound that’s Stopping the Fed
July 18, 2012 at 11:03 AM EDT
Imagine a developed economy with a highly regarded central bank and a long and distinguished tradition of progressive, state-of-the-art monetary policy-making. Imagine that central bank has been given a mandate of high employment and price stability. Imagine that it interprets “price stability” as 2% inflation, and it regards the natural rate of unemployment as being [...]