In January 2000, the Federal Open Market Committee (FOMC) instituted the practice of issuing a “balance of risks” statement along with their policy decision immediately following each FOMC meeting. Robert H. Rasche and Daniel L. Thornton evaluate the use of the balance-of-risks statement and...

This paper extends the analysis of price-level targeting to a model including the New-Keynesian Phillips Curve. We examine the inflation-output variability tradeoffs implied by optimal inflation and price-level rules. In previous work with the Neoclassical Phillips Curve, we found that the...

The following are comments in response to Lars Svensson's "Targeting versus Instrument Rules for Monetary Policy: What Is Wrong with McCallum and Nelson?"