The Federal Reserve (almost) 100
As the Federal Reserve reaches its hundredth anniversary, understanding its achievements and failures serves as a useful guide to needed reforms. My paper is an invited comment on the analysis by Selgin, White, and Lastrapes who conclude that the Federal Reserve’s performance is not an improvement on pre-Federal Reserve policy. I draw a slightly different conclusion. The only periods in which the Federal Reserve achieved relatively steady growth and low inflation are the two periods in which if acted as if guided by a rule. The years are 1923–1928 under a modified gold standard and 1985–2003 when it acted as if it followed a Taylor rule.
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- Athanasios Orphanides, 2001.
"Monetary Policy Rules Based on Real-Time Data,"
American Economic Review,
American Economic Association, vol. 91(4), pages 964-985, September.
- Athanasios Orphanides, 1998. "Monetary policy rules based on real-time data," Finance and Economics Discussion Series 1998-03, Board of Governors of the Federal Reserve System (U.S.).
- Taylor, John B., 1993. "Discretion versus policy rules in practice," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 39(1), pages 195-214, December.
- Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-491, June. Full references (including those not matched with items on IDEAS)
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