News and Events - Narayana Kocherlakota Speech - Looking Back at Four Years of Federal Reserve Actions - November 8, 2011 | The Federal Reserve Bank of Minneapolis

News and Events - Narayana Kocherlakota Speech - Looking Back at Four Years of Federal Reserve Actions - November 8, 2011 | The Federal Reserve Bank of Minneapolis:

Narayana Kocherlakota, President of Fed Bank of Minneapolis, thinks that the Fed dual mandate is invalid because it is hard. At least we get an explanation about why the Fed seems to care more about inflation than employment.

An important and ongoing communications challenge for the FOMC is that it is much harder to quantify the maximum employment mandate than the price stability mandate. Changes in minimum wage policy, demography, taxes and regulations, technological productivity, job market efficiency, unemployment insurance benefits, entrepreneurial credit access and social norms all influence what we might consider “maximum employment.” Trying to offset these changes in the economy with monetary policy can lead to a dangerous drift in inflationary expectations and ultimately in inflation itself."