The Federal Reserve and other central banks tend to change short-term interest rates in
sequences of small steps in the same direction and reverse the direction of interest rate …

I consider the desirability of the observed tendency of central banks to adjust interest rates
only gradually in response to changes in economic conditions. I show, in the context of a …

This paper studies optimal fiscal and monetary policy under sticky product prices. The
theoretical framework is a stochastic production economy. The government finances an …

This paper considers the desirability of the observed tendency of central banks to adjust
interest rates only gradually in response to changes in economic conditions. It shows, in the …

Numerous studies have used quarterly data to estimate monetary policy rules or reaction
functions that appear to exhibit a very slow partial adjustment of the policy interest rate. The …

We use a micro-founded macroeconometric modeling framework to investigate the design of
monetary policy when the central bank faces uncertainty about the true structure of the …

Over the past several years, Taylor rules have attracted increased attention of analysts,
policymakers, and the financial press. Taylor rules recommend a setting for the level of the …

This paper shows that—in contrast to the received wisdom—uncertainty about the
parameters in a dynamic macroeconomic model may lead to more aggressive monetary …

The tendency for changes in the federal funds rate to be implemented gradually has been
considered evidence of an interest-rate smoothing objective for the Federal Reserve. This …

FoR THE MAJORITY OF MY PROFESSIONAL LIFE, I have had the good fortune to be
simultaneously involved both as a participant in, and as an academic observer of, central …