The Godley–Tobin Memorial Lecture

In the post-2020 aftermath of the COVID plague depression, the Powell Fed appropriately balances risks ex ante, and compared to counterfactual alternatives, the ex post outcomes are good. Historically, most inflation episodes ebb without adaptive spirals; the 2020s follow that pattern; thus, the Fed’s moving late but then moving fast to the Wicksellian neutral rate is a successful policy. Powell’s FOMC makes prudent, data‑dependent judgments under our immense uncertainty about the state of the economy and our extremely limited understanding of how the macroeconomy actually works.