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Fed's Plosser at odds with policy approach favored by Yellen
The Great Recession could have done permanent damage to potential U.S. output, a top Federal Reserve official said on Saturday, taking an indirect shot at more cyclical approaches to policy-making that is favored by many economists, including the next Fed chair. Philadelphia Fed President Charles Plosser said in a speech he is skeptical of so-called "optimal control" approaches to monetary policy in which mathematical models are used to predict when things like unemployment and economic growth will return to more normal levels. Fed Vice Chair Janet Yellen, who is set to take the reins at the U.S. central bank next ... (full story)