Plosser: central bankers should take ‘great care' in changing view on neutral interest rate
Distinguishing transitory from permanent changes in growth and interest rates is ‘tricky task'
Monetary policy-makers should take "great care in making significant adjustments in their view of the neutral policy rate", Federal Reserve Bank of Philadelphia president Charles Plosser said in a speech on November 13.
"Distinguishing short-run or transitory fluctuations from more permanent or persistent movements in growth and real interest rates is a tricky and difficult task," Plosser argued. "It is nearly impossible in real time".
He described productivity as the "ultimate means to economic
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