Must the FOMC increase its target before inflation, or will inflation increase and cause the FOMC to increase its target?

The only outcome consistent with the Fisher equation holding and the FOMC’s zero interest rate policy is that the “long run” is considerably longer than 4.5 years.

The behavior of term OIS rates following the three instances of FOMC verbal guidance provides no support for the efficacy of the FOMC’s forward guidance monetary policy.

Our approach offers several advantages over LSAPs as a financial mechanism to enhance forward guidance.

Greater transparency is a means to better synchronize the public with policymakers and minimize the risks of undesirable economic outcomes.

Forward guidance consists of communicating to the public the stance of monetary policy that is expected to prevail in the future.

The Federal Reserve is just one of several central banks that have adopted forward guidance since the beginning of the financial crisis and in an environment of near-zero policy rates (zero lower bound).

If investment spending is sufficiently insensitive to interest rate changes and the effect of Fed actions on interest rates is sufficiently weak, the net effect of the persistent zero interest rate policy could be negative.

The November 2012 unemployment rate would have been 1.6 percent higher had the labor force participation rate declined as it did following the 2001 recession.

How should one conclude whether the data have come in stronger, weaker, or as expected?>