A DIFFERENT APPROACH FOR PLEDGES RELATED TO FINANCIAL SUCCESS

In a purely technical sense, the trustworthy Odyssean FG generates results that are mindbogglingly strong within the context of rational expectation models. This conundrum is referred to as the "forward direction dilemma," which is a word that was used to characterize it (Del Negro et al. [ 2015]). They subsequently established what are known as "calendar-based disclosures," which included explicit timelines, but they retained their pledges related to financial success (Fed [August 2012]; ECB [June 2018]). Some ultimately adopted the "threshold-based" FG, which is when a specified unemployment rate and inflation projections or expectations are mentioned as the benchmark to keep interest rates low. In the case of the BoE, the stock of bonds acquired under LSAPs is used as the benchmark. That was the Federal Reserve in December of 2012, and the Bank of England in August of 2013. However, central banks did not see these indicators as being triggers, and particularly thresholds for the unemployment rate were achieved without any adjustments in policy being implemented.