VGSH - James Bullard On FAIT Nominal GDP Targeting And The Fed's Upcoming Framework Review

2024-07-24 10:45:00 ET

Summary

• As the Fed approaches its next framework review, there are numerous modifications the central bank could consider to further enhance its current monetary policy framework.
• If inflation is exceptionally low, the Fed might do some quantitative easing, it might do some forward guidance, and it might even allow some overshooting a little bit in that circumstance.
• James Bullard, former president and CEO of the Federal Reserve Bank of St. Louis, shares his views on how to improve the FOMC’s economic reporting, the case for implementing nominal GDP targeting, the future of R-star, and much more.

James Bullard was the president and CEO of the Federal Reserve Bank of St. Louis from 2008 to 2023, and he is currently the dean of the Mitchell E. Daniels Jr. School of Business at Purdue University. James is also a previous guest of the show, and he rejoins David on Macro Musings to talk about his time at the Fed, FAIT, and the upcoming Fed framework review. Specifically, James and David also discuss how to improve the FOMC’s economic reporting, the case for implementing nominal GDP targeting, the future of R-star, and much more.

David Beckworth: Jim, welcome back to the program.

James Bullard: Great to be here. Thanks for having me.

Beckworth: It's great to have you on. You've been a dean now for almost a year. Is that correct?

Bullard: Yes, about 11 months.

Beckworth: Okay, so you're well into your journey there as a dean. I'm just wondering, what is it like going from being a Fed president to a business school dean?

Bullard: Yes, I've been joking with people a little bit that it's not all as different as you might think. You certainly have an entity within a bigger system, which is very much what the Federal Reserve was like, and you have certain responsibilities in your group compared to the overall enterprise. So, [there are] lots of dotted lines, lots of committees, but, also, authority within your own unit. And there's a lot to like about the Daniels School. They're trying to reimagine the business school here. The technology on campus is fantastic. Purdue will turn out more engineers than anyone in the nation this coming year. So, I think the fact that technology is so important to the business world makes for a great combination between engineering and business and science here, and in other aspects of the campus. So, it's been really fun so far, and I've really enjoyed it....

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