Kansas City Fed’s Annual Jackson Hole Symposium is always on the discourse led by the current Fed Chair. For the initial symposium, those at the Kansas City Fed were canny enough to host it in Jackson Hole to entice the fly-fishing enthusiast Fed Chair Volcker to attend. In subsequent years, Chairs Greenspan, Bernanke, Yellen, and Powell (and even other central bank governors such as Mario Draghi) have all used it as a platform for major policy announcements. This year’s symposium was no different; it was used by Chair Powell to likely seal the coffin of the Fed’s previous framework shift to the ill-fated “flexible average inflation target” (announced at Jackson Hole in 2020)—and to signal the Fed’s intention to lower rates at the upcoming September FOMC meeting.
In this Economics Weekly, Richard de Chazal runs through one such paper presented this year that offers a look back and a look forward at the real neutral rate of interest (r-star).