, it “ seeks to achieve inflation that averages 2 percent over time, ” and — in the same sentence — that therefore “ following periods when inflation has been running persistently below 2 percent, appropriate monetary policy will likely aim to achieve inflation moderately above 2 percent for some time. ” as chair powell indicated the statement is available on the board ’ s website at https : / / www. federalreserve. gov / monetarypolicy / review - of - monetary - policy - strategy - tools - andcommunications - statement - on - longer - run - goals - monetary - policy - strategy. htm. - 5in his jackson hole remarks, we think of our new framework as an evolution from “ flexible inflation targeting ” to “ flexible average inflation targeting. ” 4 while this new framework represents a robust evolution in our monetary policy strategy, this strategy is in service to the dual - mandate goals of monetary policy assigned to the federal reserve by the congress — maximum employment and price stability — which remain unchanged. 5 concluding remarks while economic recovery since the spring collapse has been robust, let us not forget that full economic recovery from the covid - 19 recession has a long way to go. although the unemployment rate has declined sharply since april, it remains elevated as of september at 7. 9 percent and would be about 3 percentage points higher if labor force participation remained at february 2020 levels. moreover, despite a recent uptick, inflation is still running below our 2 percent longer - run objective. it will take some time to return to the levels of economic activity and employment that prevailed at the business cycle peak in february, and additional support from monetary — and likely fiscal — policy will be needed. speaking for the fed, i can assure you that we are committed to using our full range of tools to support the economy and to help ensure that the recovery from this difficult period will be as robust and rapid as possible. see jerome h. powell ( 2020 ), “ new economic challenges and the fed ’ s monetary policy review, ” speech delivered at “ navigating the decade ahead : implications for monetary policy, ” a symposium sponsored by the federal reserve bank of kansas city, held in jackson hole, wyo. ( via webcast ), august 27, https : / / www. federalreserve. gov / newsevents / speech / powell20200827a. htm. see richard h. clarida ( 2020 ), “ the federal reserve ’ s

pt. com / 2013 / 02 / 12 / bank - of - england - publications - news - releases - news - release - g7statement. bis central bankers ’ speeches advanced - economy demand. which of these two effects would be greater is an empirical matter. simulations of the federal reserve board ’ s econometric models of the global economy suggest that the effects are roughly offsetting, so that accommodative monetary policies in the advanced economies do not appear, on net, to have adverse consequences for output and exports in the emerging market economies. 8 a return to solid growth among the advanced economies is ultimately in the interest of advanced and emerging market economies alike. regarding capital flows : it is true that interest rate differentials associated with differences in national monetary policies can promote cross - border capital flows as investors seek higher returns. but my reading of recent research makes me skeptical that these policy differences are the dominant force behind capital flows to emerging market economies ; differences in growth prospects across countries and swings in investor risk sentiment seem to have played a larger role. 9 moreover, the fact that some emerging market economies have policies that depress the values of their currencies may create an expectation of future appreciation that in and of itself induces speculative inflows. of course, heavy capital inflows and their volatility pose challenges to emerging market policymakers, whatever their source. policymakers do have some tools to address these concerns. in recent years, emerging market nations have implemented macroprudential measures aimed at strengthening their financial systems and reducing overheating in specific sectors, such as property markets. policymakers have also experimented with various forms of capital controls. such controls raise concerns about effectiveness, cost of implementation, and possible microeconomic distortions. nevertheless, the international monetary fund has suggested that, in carefully circumscribed circumstances, capital controls may be a useful tool. 10 in sum, the advanced industrial economies are currently pursuing appropriately expansionary policies to help support recovery and price stability in their own countries. as the modern literature on the great depression demonstrates, these policies confer net benefits on the world economy as a whole and should not be confused with zero - or negative - sum policies of trade diversion. in fact, the simultaneous use by several countries of accommodative policy can be mutually reinforcing to the benefit of all. let me end these remarks as i began, by paying tribute to mervyn king. he has been a leader