Brad: Must-Read: I do not get this: it was 21 years ago that I learned--from an early draft of Staiger, Stock, and Watson (1997)--that nobody had any business thinking or acting on any belief that they had the correct estimate of the natural rate. The natural rate shifts. And because the natural rate shifts there is no way to estimate it precisely, even in retrospect, let along in prospect
The central bank has no direct estimate of 'time to completion', hence the term lengths will be estimates. The currency bankers knows when loan/deposit balances are statistically incoherent. The currency banker bot knows this within a day, or quarter. The central banker discovers the imbalance after 50 years.
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