Monetary policy and stability during six periods in US economic history: 1959ヨ2008: a novel, nonlinear monetary policy rule
نویسندگان
چکیده
We investigate the monetary policy of the Federal Reserve Board during six periods in US economic history 1959–2008. In particular, we examine the Fed’s response to changes in three guiding variables: inflation, π, unemployment, U, and industrial production, y, during periods with low and high economic stability. We identify separate responses for the Fed’s change in interest rate depending upon (i) the current rate, FF, and the guiding variables’ level below or above their average values and (ii) recent movements in inflation and unemployment. The change in rate, FF, can then be calculated. We identify policies that both increased and decreased economic stability. © 2012 Society for Policy Modeling. Published by Elsevier Inc. All rights reserved. JEL classification: C22; C54; E3; E5
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