These are introductory remarks for the panel discussion on “The Next Strategy Reviews,” for the Hoover Conference, “Getting Global Monetary Policy On Track.” The panelists were Athanasios Orphanides, Mickey Levy and Charles Plosser, Jón Steinsson, and Lawrence Summers.
I don't think that a good strategy to fit current Fed's mandate could be found or honestly followed. On the other hand, an attempt for changing the Fed's mandate probably would made it worse. IMO the scale of the problem is at the constitutional level, but a good political consensus could be reached only after a bad fiscal/currency crisis. The subject of this conference seems to me quite ambitious.
All good points. But going forward it would be helpful to have these strategy reviews grapple with what a "strategy" actually is:
- A goal. Where are you going? Is it feasible?
- A process. How do you propose to get there?
- Resources. What tools do you need and do you have them?
In my opinion central banks have done a poor job of answering each of these.
I don't think that a good strategy to fit current Fed's mandate could be found or honestly followed. On the other hand, an attempt for changing the Fed's mandate probably would made it worse. IMO the scale of the problem is at the constitutional level, but a good political consensus could be reached only after a bad fiscal/currency crisis. The subject of this conference seems to me quite ambitious.