Findings from Federal Reserve Board Reveals New Findings on Investment (Monetary Policy, Employment Shortfalls, and the Natural Rate Hypothesis): Investment

2026 JUL 14 (NewsRx) -- By a News Reporter-Staff News Editor at Economics Daily Report -- Researchers detail new data in Investment. According to news originating from Washington, District of Columbia, by NewsRx editors, the research stated, “Activity shortfalls are more costly than strong activity. I consider optimal monetary policy under discretion with an asymmetric (shortfalls) loss function in a natural rate model.”

Our news journalists obtained a quote from the research from Federal Reserve Board, “The optimal monetary policy exacerbates shortfalls, owing to the adjustment of expectations implied by the natural rate hypothesis, and leads to an inflationary bias. Mandating a central bank objective with greater symmetry lowers activity shortfalls and inflation bias. The model also implies that an optimal monetary policy does not accommodate fluctuations from aggregate demand shocks.”

According to the news editors, the research concluded: “The analysis implies that monetary accommodation of strong economic activity requires justifications other than asymmetric costs of shortfalls.”

This research has been peer-reviewed.

For more information on this research see: Monetary Policy, Employment Shortfalls, and the Natural Rate Hypothesis. Journal of Money, Credit and Banking, 2026. Journal of Money, Credit and Banking can be contacted at: Wiley, 111 River St, Hoboken 07030-5774, NJ, USA. (Wiley-Blackwell - http://www.wiley.com/; Journal of Money, Credit and Banking - http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1538-4616)

The news correspondents report that additional information may be obtained from Michael T. Kiley, Federal Reserve Board, Div Monetary Affairs, Washington, DC 20551, United States.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1111/jmcb.70067. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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