With the availability of micro price data, however, the conventional wisdom on purchasing power parity has been under scrutiny.1 At the Bundesbank, we actively explore how the benefits of new data sources and of Big Data can be harnessed for use in our daily work.
As I noted earlier, each FOMC participant's projection is made under the assumption of "appropriate" monetary policy--that is, the path of policy calibrated to achieve outcomes for economic activity and inflation that are most consistent with our dual objectives of price stability and maximum employment.