Regional President Speech

Search Site Home > James Bullard, President and CEO > James Bullard - Commentary > The St. Louis Fed's New Characterization of the Outlook for the U.S. Economy From the President Key Policy Papers Speeches, Presentations and Commentary Research Papers Media Interviews June 17, 2016 President James Bullard and his co-authors explain the St. Louis Fed’s new characterization of the U.S. macroeconomic and monetary policy outlook, which more explicitly takes into account uncertainty about possible medium- and longer-run outcomes. The new approach is based on the idea that the economy may visit a set of possible regimes instead of converging to a single, longrun steady state. As such, the new approach does not include projections for long-run values for U.S. macroeconomic variables or for the policy rate. Paper (pdf) | Media Call Audio (below) James Bullard Some details: President and Chief Executive O cer The idea that the economy will converge to a single, long-run steady state (with key macroeconomic variables returning to long-run averages) is being abandoned. Bio Curriculum Vitae Staff Contacts IDEAS/RePEc Pro le In its place, a new narrative emerges—one that considers medium- and longer-term outcomes in terms of regimes. Examples of regimes would include periods of no recession and recession, periods of low productivity growth and high productivity growth, and periods of low returns on government debt and high returns. Regimes are generally viewed as persistent, and optimal monetary policy is viewed as regimedependent. This new approach delivers a simple forecast of key macroeconomic variables that are likely to persist over the next 2.5 years: real output growth of 2 percent, unemployment of 4.7 percent and in ation of 2 percent. Under this regime, the appropriate policy rate path would be 0.63 percent over the forecast Photos Videos Subscribe: Email alerts RSS "Rationally, let it be said in a whisper, experience is certainly worth more than theory." Amerigo Vespucci horizon. For the longer run, the new approach does not contain forecasts for macroeconomic variables or the policy rate, as predicting exactly how and when a regime will change is di cult. The best path today is to forecast that the current regime will persist and set appropriate policy for this regime. Media Call Audio: ST. LOUIS FED 30 St. 00:00:00 30New Characterization of the Outlo… The Louis Fed's GENERAL Home About Us Bank Supervision Careers Community Development Economic Education Events Inside the Economy Museum Newsroom On the Economy Blog Open Vault Blog OUR DISTRICT Little Rock Branch Louisville Branch Memphis Branch Agricultural Finance Monitor Housing Market Conditions SELECTED PUBLICATIONS Bridges Economic Synopses Housing Market Perspectives In the Balance Page One Economics The Quarterly Debt Monitor Review Regional Economist ST. LOUIS FED PRESIDENT James Bullard's Website INITIATIVES Center for Household Financial Stability Dialogue with the Fed Federal Banking Regulations FOMC Speak In Plain English - Making Sense of the Federal Reserve Timely Topics Podcasts and Videos DATA AND INFORMATION SERVICES CASSIDI® FRASER® FRED® FRED® Blog GeoFRED® IDEAS FOLLOW THE FED Twitter Facebook YouTube Google Plus Email Subscriptions RSS CONTACT US | LEGAL INFORMATION | PRIVACY NOTICE & POLICY | FEDERAL RESERVE SYSTEM ONLINE 

James Bullard (2016, June 16). Regional President Speech. Speeches, Federal Reserve. https://whenthefedspeaks.com/doc/regional_speeche_20160617_james_bullard

@misc{wtfs_regional_speeche_20160617_james_bullard,
  author = {James Bullard},
  title = {Regional President Speech},
  year = {2016},
  month = {Jun},
  howpublished = {Speeches, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/regional_speeche_20160617_james_bullard},
  note = {Retrieved via When the Fed Speaks corpus}
}