Proponents of simple feedback policies argue that, as we are far from certain about which of many possible economic models provides the best description of the U.S. economy, the safest course is to adopt one of these robust feedback policies, modified as necessary by policymakers’ insight and judgment, and to stick with it.6 The use of simple feedback policies also addresses to some degree the complications raised by the role of private-sector expectations.
Because simple feedback policies link the central bank’s policy instrument to a short list of macroeconomic variables, these policies should be relatively easy for the public to understand and to use in forming expectations of the way monetary policy will evolve in the future.