Thank you for the invitation to speak at the Carroll Round this year.1 Economics, like any other discipline, has its own established canon and set of rules and models. But it is also constantly evolving, growing, and changing shape. New approaches and methods are developed.
How do we reconcile this apparent incongruity? It could be that the FOMC is using its forward guidance as a commitment device or signal for a more accommodative policy well into the future, as in the second approach I have discussed.