In testimony yesterday before the House Committee on Financial Services Task Force on Monetary Policy, Treasury Market Resilience, and Economic Prosperity, AAF President Douglas Holtz-Eakin discusses the problems with the Federal Reserve’s dual mandate.

Key points:

• The Federal Reserve has too many mandates and its mission should be simplified.
• Although there are reasonable arguments on both sides of the question, on balance that the U.S. economy would be best served by a single mandate for the Fed.
• The design of that single mandate could focus on either prices or nominal gross domestic product, although targeting the level of prices would be most practicable.

Read the testimony.

Watch the hearing.