Monetary policy rules may not stabilize output as promised
The paper questions the effectiveness of using natural rates of interest and output in modern economic theories. By comparing newer ideas with older ones, it shows that the foundations of current monetary policies are unclear. New strategies may not be better than older ones for stabilizing the economy. Also, defining natural rates of interest is tricky without considering the impact of monetary policies. The use of natural-rate concepts in current theories ignores important issues from the past.