Search Results
Journal Article
The effectiveness of monetary policy
This analysis addresses changing views of the role and effectiveness of monetary policy, inflation targeting as an "effective monetary policy," monetary policy and short-run (output) stabilization, and problems in implementing a short-run stabilization policy.
Working Paper
The reform of October 1979: how it happened and why
This study offers a historical review of the monetary policy reform of October 6, 1979, and discusses the influences behind it and its significance. We lay out the record from the start of 1979 through the spring of 1980, relying almost exclusively upon contemporaneous sources, including the recently released transcripts of Federal Open Market Committee (FOMC) meetings during 1979. We then present and discuss in detail the reasons for the FOMC's adoption of the reform and the communications challenge presented to the Committee during this period. Further, we examine whether the essential ...
Journal Article
The FOMC's balance-of-risks statement and market expectations of policy actions
In January 2000, the Federal Open Market Committee (FOMC) instituted the practice of issuing a ?balance of risks? statement along with their policy decision immediately following each FOMC meeting. Robert H. Rasche and Daniel L. Thornton evaluate the use of the balance-of-risks statement and the market?s interpretation of it. They find that the balance-of-risks statement is one of the factors that market participants use to determine the likelihood that the FOMC will adjust its target for the federal funds rate at their next meeting. Moreover, they find that, on some occasions, the FOMC ...
Journal Article
The impact of changes in FOMC disclosure practices on the transparency of monetary policy: are markets and the FOMC better "synched"?
This analysis examines how expectations of market participants about future Federal Open Market Committee policy actions have changed over the period since 1989, during which the FOMC made a sequence of changes to improve the transparency of monetary policy.
Working Paper
The effectiveness of monetary policy
The analysis addresses changing views of the role and effectiveness of monetary policy, inflation targeting as an "effective monetary policy," monetary policy and short-run (output) stabilization, and problems in implementing a short-run stabilization policy.
Working Paper
Inflation: do expectations trump the gap?
We measure the relative contribution of the deviation of real activity from its equilibrium (the gap), ?supply shock? variables, and long-horizon inflation forecasts for explaining the U.S. inflation rate in the post-war period. For alternative specifications for the inflation driving process and measures of inflation and the gap we reach a similar conclusion: the contribution of changes in long-horizon inflation forecasts dominates that for the gap and supply shock variables. Put another way, variation in long-horizon inflation forecasts explains the bulk of the movement in realized ...