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Monetary policy in the early 1980's

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  • Robert L. Hetzel

Abstract

A requirement for the study of macroeconomic behavior in the early 1980s is an understanding of the monetary policy pursued by the Federal Reserve and of the way this policy was implemented. In an attempt to fulfill this requirement, the formulation and implementation of monetary policy are discussed in this paper for the period of October 1979 to December 1983. Particular attention is paid to the choice by the Fed of the funds rate or the money supply as its primary policy variable. It is contended that the operating procedures adopted in October 1979 contributed to the cyclical behavior of interest rates and money.

Suggested Citation

  • Robert L. Hetzel, 1984. "Monetary policy in the early 1980's," Working Paper 84-01, Federal Reserve Bank of Richmond.
    • Handle: RePEc:fip:fedrwp:84-01
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    References listed on IDEAS

    as
    1. Michael L. Mussa & Paul A. Volcker & James Tobin, 1994. "Monetary Policy," NBER Chapters, in: American Economic Policy in the 1980s, pages 81-164, National Bureau of Economic Research, Inc.
    2. Marvin Goodfriend, 1982. "A model of money stock determination with loan demand and a banking system balance sheet constraint," Economic Review, Federal Reserve Bank of Richmond, vol. 68(Jan), pages 3-16.
    3. Robert L. Hetzel, 1984. "The formulation of monetary policy," Working Paper 84-02, Federal Reserve Bank of Richmond.
    4. Barbara Bennett, 1982. "\"Shift adjustments\" to the monetary aggregates," Economic Review, Federal Reserve Bank of San Francisco, issue Spr, pages 6-18.
    5. Hetzel, Robert L, 1981. "The Federal Reserve System and Control of the Money Supply in the 1970s," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 13(1), pages 31-43, February.
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