Journal Article

Opinion: Data Measurement and Monetary Policy

Abstract: The impact of monetary policy on the economy unfolds over time, with what Milton Friedman described as a "lag that is both long and variable." To make ideal policy, central bankers would have to know the nature of shocks to supply and demand, the fundamental structure of the U.S. economy (for example, the level of maximum employment or how monetary policy changes are transmitted to firms and households), the evolution of non-monetary structural changes and economic policy, and the rate at which monetary policy would be neither expansionary nor contractionary (the neutral rate).

Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Econ Focus

Publication Date: 2025-10-01

Volume: 25

Issue: Q4