Mr Meyer remarks on structural change and monetary policy in the United States (Central Bank Articles and Speeches, 3 Mar 2000)

In my remarks, I will offer a bridge from today’s discussion of structural changes to the implications for monetary policy, the subject of tomorrow’s agenda. In my view, the most important challenges to monetary policy related to structural change in this episode arise from possible changes in aggregate supply specifically in the non-accelerating inflation rate of unemployment (NAIRU) and in trend growth. The key challenge for monetary policymakers during this period, in my view, has been to allow the economy to realize the full benefits of the new possibilities while avoiding an overheated economy. More fundamentally, the challenge has been to adapt the strategy of monetary policy in light of the uncertainties associated with structural change. My focus is therefore not on structural change per se but rather on the uncertainty about key parameters likely to be heightened during a period of structural change.