In her CMFA working paper, Carola Binder discusses a new approach for understanding why central bankers are pressured—by both politicians and the public—to deviate from their mandates. Further, Binder argues that this new approach “strengthens the case for limiting monetary policymakers’ discretion by implementing rule-based monetary policy.”…

average inflation targeting: a semi-Wicksellian effort

On August 27, the FOMC announced a new “Statement on Longer-Run Goals and Monetary Policy Strategy,” in which it replaced its earlier Taylor Rule strategy for controlling inflation with what might be called a "Semi-Wicksell Rule." Fed Chair Jerome Powell elaborated on the statement in a speech…