Base drift and the longer run growth of M1 : experience from a decade of monetary targeting
This article discusses a technical aspect of the Federal Reserve's monetary targeting procedure that has come to be known as "base drift." The Fed has been announcing larger ranges for the growth of M1 and other monetary aggregates since 1975. These ranges have been expressed in terms of rates of growth from a base quarter to the quarter four quarters later. The term "base drift" refers to the Fed's practice of using the actual dollar level of an aggregate in the base quarter as the base level for the target range, rather than the midpoint of the targeted range set in the preceding targeting period.
|Date of creation:||1985|
|Contact details of provider:|| Web page: http://www.richmondfed.org/|
More information through EDIRC
|Order Information:|| Web: http://www.richmondfed.org/publications/ Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- William Poole, 1976. "Interpreting the Fed's Monetary Targets," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 7(1), pages 247-260.
- 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, issue Jan, pages 3-16.
- Stephen H. Axilrod, 1985. "U.S. monetary policy in recent years: an overview," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Jan, pages 14-24.