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

This is also true, if I might add just one last point, in the “policymaker perfect foresight” simulation. Without the usual penalty on interest rate volatility—remember a policymaker in that case is taking everything into account, including the kinds of things that Glenn was referring to such as the tech bubble and current and future geopolitical risks—it, too, predicts very volatile, very aggressive monetary policy as the optimal thing to do. So in short, this outcome has nothing to do with the parsimony of a simple rule and has everything to do with the rest of the structure.

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