Title:

Monetary Policy With Unknown Natural Rates, No. 11-07

PREVIOUS | NEXT

Monetary Policy With Unknown Natural Rates, No. 11-07

DATE: July 2011

PART OF: AUTHORS: CONTRIBUTING AUTHOR:

ABSTRACT: The "unemployment gap" is an important factor in monetary policy decisions. But the size of the gap depends on the natural rate of unemployment, which is inherently unobservable. The uncertainty surrounding estimates of the natural rate, and the costs of mismeasuring it, may recommend a policy rule that responds to the rate of change in the actual unemployment rate rather than to the implied unemployment gap.

Download (pdf) View Full Text

Share this page:


Diversity is critical to the Federal Reserve, and we are firmly committed to fostering a diverse and inclusive culture throughout the Federal Reserve System. Collections within FRASER contain historical language, content, and descriptions that reflect the time period within which they were created and the views of their creators. Certain collections contain objectionable content—for example, discriminatory or biased language used to refer to racial, ethnic, and cultural groups. These viewpoints and attitudes are inconsistent with our values, but the original descriptions are retained to ensure that they are not erased from the historical record.
Save & Share
less

Lubik, Thomas A. , Romero, Jessica Sackett and Federal Reserve Bank of Richmond. "Monetary Policy With Unknown Natural Rates, No. 11-07," Economic Brief (July 2011). https://fraser.stlouisfed.org/title/6034/item/583890, accessed on May 22, 2022.

More Information
less

THEMES:

Metadata (XML)
Metadata (JSON)