On March 16, Marvin Goodfriend, the Friends of Allan H. Meltzer Professor of Economics, testified in Washington, D.C before Congress at a House Financial Services Committee hearing on “Sound Monetary Policy.”
Also testifying were John Allison, Executive in Residence at the Wake Forest School of Business and former Chairman and Chief Executive Officer of BB&T Corporation; John B. Taylor, the Mary and Robert Raymond Professor of Economics at Stanford University; and Josh Bivens, Director of Research at the Economic Policy Institute.
Goodfriend’s testimony addressed why the Federal Reserve needs a credible commitment to price stability, and more specifically, it examined the Federal Open Market Committee’s (FOMC) 2012 statement on “Longer-Run Goals and Monetary Policy Strategy.” This statement was created to communicate to the public about the FOMC’s goals to meet a Federal Reserve mandate to maintain stable prices and maximum employment, and to hold the Fed accountable to these goals. By setting this monetary policy, the FOMC set out to lessen deviations of inflation from its longer-run goal, and deviations of employment from the FOMC's assessments of its maximum level.
Goodfriend’s full written testimony
Video of the hearing (Goodfriend’s testimony appears around the 00:42:15 mark, and he answers questions around the 2:05:00 mark.)