Narayana Kocherlakota, Columnist

The Fed’s Risky Plan to Boost Unemployment

Is nailing the inflation target worth it?

December 19, 2018 at 7:23 PM UTC

Narayana Kocherlakota is a Bloomberg Opinion columnist. He is a professor of economics at the University of Rochester and was president of the Federal Reserve Bank of Minneapolis from 2009 to 2015.

Worth sacrificing?
Photographer: David Paul Morris/Bloomberg

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The U.S. Federal Reserve appears to be planning a risky endeavor: Sometime in the first half of the next decade, it intends to slow the economy enough to increase unemployment by about 1.4 million people — all in the name of reducing inflation by around a tenth of one percent.

I can’t help but wonder whether the costs will outweigh the benefits.