And an important part of our understanding of the economy is the lesson that people's behavior may change over time. Furthermore, while requiring the Federal Reserve to target an inflation rate might seem to make our intentions more transparent and credible, the existing twin goals of stable prices and maximum sustainable growth, as I noted, are mutually compatible.
Given that inflation is low and stable and that the Federal Reserve has achieved credibility in its commitment to maintain price stability while still acting to buffer employment and output from excessive variability, I see no advantage to taking away our mandate to be concerned about developments other than inflation rates or inflation prospects.