The Federal Reserve has made significant changes in its predisposition to release information over time. This paper reports the results of experimental asset markets designed to investigate how the public disclosure of uncertain information affects market and individual outcomes. In one set of...

Our case study of the 1995 economic slowdown reveals that part of the widespread deterioration in economic indicators was predictable in light of 1994 monetary policy actions. But it was also partly unanticipated due to a modest adverse supply shock in the first quarter of 1995.

This article reviews some of the issues economists confront in attempting to compile facts about how monetary policy actions affect the economy.

Most central banks conduct monetary policy by setting targets for overnight interest rates. During the 1990s, central banks have tended to move these interest rates in small steps without reversing direction quickly, a practice called interest rate smoothing. For example, the majority of Federal...