Professor Narayana Kocherlakota of the University of Rochester (and former President of the Federal Reserve Bank of Minneapolis) gave the keynote speach at our Choosing the Right Target conference. He argues that the ability of central banks to control inflation is asymmentric. While they can keep inflation from increasing beyond a given ceiling, they are not able to credibly commit to a floor for inflation with the tools at their disposal. Establishing a floor for inflation requires coordination between fiscal and monetary policy.
Watch the complete keynote presentation:
