The Federal Reserve currently has two legislated goals - price stability and full employment - but a debate continues about making price stability the Fed's primary and overriding goal. Evidence from the recent history of monetary policy contradicts arguments in favor of assigning primacy to...

Using theoretical predictions, econometric results, and the example of the Volcker disinflation, Willem Thorbecke establishes that through disinflation's burden on the durable goods and construction industries, small firms, and low-wage workers and its benefits to bond market investors, it...

The performance of the U.S. economy between 1994 and 1998 was so good that some pundits began to call for the Federal Reserve to increase interest rates to depress economic activity and reduce asset prices. Using a combination of methods the author argues that slowing the economy to stabilize...

Macroeconomists traditionally focus on the aggregate consequences of disinflationary monetary policy, not its distributional effects. This paper considers these distributional effects. The evidence indicates that contractionary monetary policy harms interest rate-sensitive industries by...

Using theoretical predictions, econometric results, and the example of the Volcker disinflation, Thorbecke establishes that through disinflation's burden on the durable goods and construction industries, small firms, and low-wage workers and its benefits to bond market investors, it effects a...