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In a world shaped by globalization, tech, and AI, the Fed needs a new tool

Central Banks, especially the Federal Reserve Bank, love to reference models to justify their rate decisions. And, while much of the business community and many economists question the relevance of the Philips Curve, the Fed still uses this model. But the model is outdated already and will become more out of sync as new innovations such as AI continue to transform our economy and workforce.

From a certain perspective, one can understand the Fed’s decision to continue using the Philips Curve, given their dual mandate of full employmen…

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