The changes we made last year to our Statement on Longer-Run Goals and Monetary Policy Strategy are well suited to address today’s challenges. We have said that we would continue our asset purchases at the current pace until we see substantial further progress toward our maximum employment and price stability See, for example, Orphanides and Williams (2013) on the role of de-anchored inflation expectations.
How can you pump prime an ailing economy when the balance of payments are weak and inflation rising? Fiji’s scenario fits snuggly into today’s agenda. Mr. Tanaka’s keynote address is about the challenges we face in the era of uncertainty. Dr Susan Adams will discuss the trade off between inflation and growth.