Federal Reserve Bank of San Francisco President John Williams said that in times of high long-term joblessness, central bankers should try to achieve full employment by letting inflation exceed their target.

“Faced with high long-term unemployment following the Great Recession, optimal monetary policy would allow inflation to overshoot its target more than in standard models,” Williams said in a paper co-written with Glenn Rudebusch, the Fed district bank’s research director. Williams doesn’t vote on policy this year.

Consumer prices may respond to short-term unemployment more than long-term unemployment, raising the possibility that inflation may accelerate even with many people jobless for extended periods, Williams and Rudebusch said. The Fed should ensure its definition of full employment includes broader measures that incorporate the long-term unemployed, they said in a paper dated Wednesday.

“Optimal policy should trade off a transitory period of excessive inflation,” Williams and Rudebusch said, “to bring the broader measure of underemployment to normal levels more quickly.”

The Federal Open Market Committee, while pursuing a 2 percent inflation goal, is considering an array of labor-market indicators to determine when to begin raising the benchmark interest rate, which has been near zero since December 2008.

Wide Range

The FOMC after a March 18-19 meeting said the timing for an increase in the main interest rate hinges on “a wide range of information, including measures of labor-market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments.”

Prior to the meeting, the committee said it would hold down interest rates as long as unemployment exceeds 6.5 percent and inflation doesn’t go beyond 2.5 percent.

Chair Janet Yellen has said she is looking at a range of job-market data, including the share of the long-term unemployed and the labor-force participation rate.

While the unemployment rate declined to 6.3 percent in April, other measures paint a gloomier picture of the U.S. labor market. Some 35.3 percent of the jobless are workers unemployed for at least 27 weeks.