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Evans Won New Fed Consensus Linking Rates to Unemployment
The Federal Reserve’s Charles Evans entered the lion’s den of monetary orthodoxy to make his pitch: unemployment must come down, even at the cost of temporarily higher inflation. Among those at the March European Central Bank symposium in Frankfurt was Otmar Issing, the former top economist at the ECB and one of Europe’s fiercest inflation fighters. Some months before, the idea of tolerating rising prices had been branded “irresponsible” by Paul Volcker, who as Fed chairman in the 1980s induced a recession to protect the value of money. “With Otmar in the audience, I was nervous,” Evans, president of ... (full story)