By Frank Shostak
It is widely accepted that by means of suitable monetary policies the US central bank can navigate the economy towards a growth path of economic stability and prosperity. The key ingredient in achieving this is price stability. Most experts are of the view that what prevents the attainment of price stability are the fluctuations of the federal funds rate around the neutral interest rate.
The neutral interest rate, it is held, is one that is consistent with stable prices and a balanced economy. What is required is for Fed policy makers to