This piper provides an overview of U.S. macroeconomic policy andperformance in the 1980s by first outlining the behavior of key economicvariables and then discussing the policies that have affected thesevariables. After gaining some insight into the interaction between thesepolicies and...

The dollar’s depreciation during the early floating rate period, 1973–1981, was a symptom of the Great Inflation. In that environment, sterilized foreign exchange interventions were ineffective in halting the dollar’s decline, but they showed a limited ability to smooth dollar movements....