Transcripts of the monetary policymaking body of the Federal Reserve from 2002–2008.

Unless you happen to have an urn and a few balls that I can select from, I don’t think I’m in any better position than you are to judge that outcome. When we have in some previous Greenbook simulations—or in the June FOMC presentation, for example— added an asset market disruption and volatility as a consequence of a change in the dollar, it is always just very arbitrary on our part. There’s no systematic link that we’ve been able to discover in the data between the exchange rate and these other things. A lot depends on the exogenous shock, if you will, that gives rise to the exchange rate change. So to mimic a world in which people became less confident about U.S. assets, we put in higher risk-premium terms and things that drive the stock market, and we get out some disruptive effects. But the dollar could move as a result of a world in which productivity gains finally started showing up in other countries—

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