The key issue at this year’s conference at Jackson Hole, besides the looming question of whether Larry Summers or Janet Yellen will replace Federal Reserve Chairman Ben Bernanke, is how to craft an exit strategy for the U.S. central bank that doesn’t crater financial markets. Bernanke and Summers won’t be at the event, and Yellen isn’t scheduled to make any speeches.
The Kansas City Fed, which is the official host of the gathering, puts together the brightest minds in academia to discuss their cutting-edge scientific research on monetary policy. This research often has an impact on policy.
Last year, for instance, Michael Woodford of Columbia University presented a technical paper that suggested that forward guidance from the Fed might be more useful than asset purchases.
