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MNI INTERVIEW: Fed Should Restore Simple 2% Goal-Brunnermeier

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Co-author of G30 paper says greater flexibility would allow central banks to act more swiftly when the economy changes.

The Federal Reserve should abandon its policy of targeting averaging inflation over some undefined period of time and restore a simpler 2% goal, Markus Brunnermeier, former adviser to the U.S. central bank and co-author of a new G30 paper, told MNI.

“Going back would be simpler,” said Brunnermeier, a Princeton University economics professor who has also worked with central banks in Germany and Japan.

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The Federal Reserve should abandon its policy of targeting averaging inflation over some undefined period of time and restore a simpler 2% goal, Markus Brunnermeier, former adviser to the U.S. central bank and co-author of a new G30 paper, told MNI.

“Going back would be simpler,” said Brunnermeier, a Princeton University economics professor who has also worked with central banks in Germany and Japan.

Keep reading...Show less