We look at how well several alternative Taylor-rule specifications describe Federal Reserve policy decisions in real time, using the newly developed Giacomini and Rossi (2007) test for non-nested model selection in the presence of (possible) parameter instability. Further, we isolate those...

With help from accommodative monetary policy, there are good reasons to believe that the economy will achieve full employment and price stability fairly soon. That prospect raises challenging issues for Federal Reserve policymakers.

The Federal Reserve has a mandate to promote price stability and full employment. Generally, “price stability” is given a forward-looking interpretation. Policy should be conducted so that expected medium-term (two- to five-year) inflation is low and stable or, less strictly, so that...

A growing body of empirical macroeconomic literature suggests that analyses using real-time data often yield substantially different—and more accurate—conclusions.

In recent months, proposals to replace all or most of the existing federal tax system with a national retail sales tax have received increased attention. The most prominent proposals include those by Reps. Dan Schaefer, R-Colo., and Billy Tauzin, R-La., and by a group called Americans for Fair...

The Great Moderation impacted job growth across nearly all regions over a fairly short period of time.