This paper presents evidence that throughout the 1973-85 period the Federal Reserve systematically used certain types of discount rate announcements to signal changes in its policy instrument, the Federal funds rate. Market participants understood the signals contained in discount rate...

Considerable attention has been devoted to the reaction of interest rates, foreign exchange rates, and stock prices to unanticipated money growth revealed by the weekly M1 money stock announcement. Numerous articles have attempted to explain why nominal interest rates rise following the...

The standard empirical test of whether the Federal Reserve can influence interest rates is to regress interest rates on current and past (actual or unexpected) values of money growth. This literature generally finds little support for the view that the Fed can influence interest rates, except...

This paper answers questions raised about our use of the Wall Street Journal in an earlier paper in which we estimated the effect of changes in the federal funds rate target -- the Federal Reserve's policy instrument -- on market interest rates in the 1970s. In that paper we found that changes...