Second, the New Neoclassical Synthesis suggests that only those prices that move sluggishly, referred to as sticky prices, should be stabilized. Indeed, these models indicate that monetary policy should try to get the economy to operate at the same level that would prevail if all prices were flexible – that is, at the so-called natural rate of output or employment.
We appreciate the opportunity to meet with your committee, which we usually do twice a year, following the release of our Monetary Policy Report.