The Center for Economic and Policy Research (CEPR) is calling for the Federal Reserve to return to its historic commitment to full employment. According to CEPR…
“The Federal Reserve should take lessons from the Fed in the 1990s and remain committed to its full employment mandate. A new report from The Center for Economic and Policy Research and The Fed Up campaign at the Center for Popular Democracy provides a history of the full employment mandate – from the Civil Rights Movement to Alan Greenspan and the actions the Federal Reserve took in the 1990s to support growth in the economy.
“The report, “The Full Employment Mandate of the Federal Reserve: Its Origins and Importance” shows how honoring the full employment mandate allowed the late 1990s economic boom and the consequential sharp reduction in the unemployment rate. In the 1990s, the Fed made the decision not to take steps to slow the economy even though the unemployment rate was already below the accepted estimates of the non-accelerating inflation rate of unemployment (NAIRU).
“Today, it is critical the Federal Reserve show the same commitment to the full employment mandate that the Fed did nearly two decades ago – make decisions on interest rates based on what is actually happening in the labor market, not solely relying on theories of the labor market that may be wrong…[read more]
For the report go here: The Full Employment Mandate of the Federal Reserve: Its Origins and Importance