Monetary policy frameworks need modifying, former Fed governor says
Lower r* requires two key modifications to flexible inflation-targeting regimes, Frederic Mishkin says
With lower neutral interest rates in advanced economies and subsequently a greater risk of low inflation, central banks should consider modifying their flexible inflation-targeting regimes, former Fed governor Frederic Mishkin tells Central Banking.
Mishkin believes that although the flexible inflation-targeting framework is not obsolete, there are some key adjustments that would help to solve the problem central banks face with a lower neutral interest rate.
“I think that if you want to move
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