A Monetary Policy for the 1990s
Lack of credibility and predictability in the monetary policy process can result from a perception of vagueness about the ultimate objectives of policy and the steps that will be taken to correct deviations from economic goals. Rather than providing more information about the current policy process, the Federal Reserve could improve the performance of the economy by committing to the long-term goal of price stability and by announcing a time frame within which to achieve it.
The views authors express in Economic Commentary are theirs and not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System. The series editor is Tasia Hane. This paper and its data are subject to revision; please visit clevelandfed.org for updates.
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