The literature on optimal monetary policy in New Keynesian models under both commitment and discretion usually solves for the optimal allocations that are consistent with a rational expectations market equilibrium, but it does not study whether the policy can be implemented given the available...

How the Federal Reserve reacts to economic activity has significant implications for the way the economy behaves. Yet the importance of these responses has received limited attention in the economic literature. Much of the literature devoted to the economic effects of monetary policy...