order to stabilize the real economy. A modified Taylor curve, the forecast Taylor curve, showing the tradeoff between the … achieved an efficient stabilization of both inflation and the real economy and what relative weight on the stability of … inflation and the real economy has effectively been applied. Ex ante evaluation may be more relevant than evaluation ex post …

The Fed kept interest rates low and essentially unchanged during the late 1990s despite a booming economy and record … evident that the productive capacity of the economy increased. Yet as events unfolded, there was uncertainty about the … expansion of the capacity of the economy and therefore about the sustainability of the Fed's policy. This paper provides an …