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> The Fed Funds policy interest rate is a clumsy instrument because it involves chasing the ever-shifting balancing point of an inherently unstable system. I d
by throw0101c 9mo ago
> The Fed Funds policy interest rate is a clumsy instrument because it involves chasing the ever-shifting balancing point of an inherently unstable system.
I don't know about "inherently unstable system", given that as central bank independence has grown so has, generally speaking, monetary stability:
* https://en.wikipedia.org/wiki/Great_Moderation https://en.wikipedia.org/wiki/Great_Moderation
- zozbot234 9mo agoGreat Moderation basically involved the adoption of price stability as a long-term policy target, as opposed to trying to keep long-term fixed exchange rates. There's no reason to change the policy target, the issue is wrt. the policy mechanism/instrument.