The Greenspan Era: Discretion, Rather Than Rules
AbstractWhat stands out in retrospect about U.S. monetary policy during the Greenspan Era is the ongoing movement away from mechanistic restrictions on the conduct of policy, together with a willingness on occasion to depart even from what more flexible guidelines dictated by contemporary conventional wisdom would imply, in the interest of carrying out the Federal Reserve System%u2019s dual mandate to pursue both stable prices and maximum employment. Part of this change was procedural %u2013 for example, the elimination of money growth targets. The most substantive demonstration of policy flexibility came in the latter half of the 1990s, as unemployment fell below 6% (in 1994), then below 5% (in 1997), and then remained below 5% for more than four years, yet the Federal Reserve did not tighten monetary policy. This policy stance was consistent with a view of the economy, including faster productivity growth and increased exposure to international competition, that Chairman Greenspan had articulated nearly a decade before.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12118.
Date of creation: Mar 2006
Date of revision:
Publication status: published as Friedman, Benjamin M. "The Greenspan Era: Discretion, Rather Than Rules," American Economic Review, 2006, v96(2,May), 174-177.
Note: EFG ME
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Find related papers by JEL classification:
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-04-08 (All new papers)
- NEP-CBA-2006-04-08 (Central Banking)
- NEP-HIS-2006-04-08 (Business, Economic & Financial History)
- NEP-MAC-2006-04-08 (Macroeconomics)
- NEP-MON-2006-04-08 (Monetary Economics)
- NEP-PKE-2006-04-08 (Post Keynesian Economics)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Philip Arestis & Alexander Mihailov, 2007.
"Flexible Rules cum Constrained Discretion: A New Consensus in Monetary Policy,"
Economic Analysis Research Group Working Papers, Henley Business School, Reading University
earg-wp2007-13, Henley Business School, Reading University.
- P Arestis & A Mihailov, 2009. "Flexible Rules cum Constrained Discretion: A New Consensus in Monetary Policy," Economic Issues Journal Articles, Economic Issues, Economic Issues, vol. 14(2), pages 27-54, September.
- Philip Arestis & Alexander Mihailov, 2007. "Flexible Rules cum Constrained Discretion: A New Consensus in Monetary Policy," Economics & Management Discussion Papers, Henley Business School, Reading University em-dp2007-53, Henley Business School, Reading University.
- Marika Karanassou & Hector Sala & Dennis J. Snower, 2007.
"The Evolution of Inflation and Unemployment: Explaining the Roaring Nineties,"
Working Papers, Queen Mary, University of London, School of Economics and Finance
604, Queen Mary, University of London, School of Economics and Finance.
- Marika Karanassou & Hector Sala & Dennis J. Snower, 2008. "The Evolution Of Inflation And Unemployment: Explaining The Roaring Nineties," Australian Economic Papers, Wiley Blackwell, Wiley Blackwell, vol. 47(4), pages 334-354, December.
- Marika Karanassou & Hector Sala & Dennis J. Snower, 2007. "The Evolution of Inflation and Unemployment: Explaining the Roaring Nineties," Kiel Working Papers 1350, Kiel Institute for the World Economy.
- Karanassou, Marika & Sala, Hector & Snower, Dennis J., 2007. "The Evolution of Inflation and Unemployment: Explaining the Roaring Nineties," IZA Discussion Papers 2900, Institute for the Study of Labor (IZA).
- Romaniuk, Katarzyna & Vranceanu, Radu, 2008. "Asset Prices and Assymetries in the Fed's Interest Rate Rule : a Financial Approach," ESSEC Working Papers, ESSEC Research Center, ESSEC Business School DR 08006, ESSEC Research Center, ESSEC Business School.
- Cinzia Alcidi & Alessandro Flamini & Andrea Fracasso, 2011. "Policy Regime Changes, Judgment and Taylor rules in the Greenspan Era," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 78(309), pages 89-107, January.
- Brian Snowdon, 2007. "The New Classical Counter-Revolution: False Path or Illuminating Complement?," Eastern Economic Journal, Eastern Economic Association, vol. 33(4), pages 541-562, Fall.
- Banerjee, A. & Malik, S., 2012. "The changing role of expectations in US monetary policy: A new look using the Livingston Survey," Working papers, Banque de France 376, Banque de France.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.