The cutting edge of recent efforts to reshape monetary policy in many countries has been to impose a price target on the central bank. This paper examines such a policy in light of the Federal Reserve System's experience with money targeting from the late 1970s through the mid 1980s. The...

A feature of U.S. postwar business cycle experience that is by now widely documented is the tendency of the spread between the respective interest rates on commercial paper and Treasury bills to widen shortly before the onset of recessions. By contrast, the paper-bill spread did not anticipate...

Short-term interest rates in the United States have been "too high" since October 1979 in the sense that both unconditional and conditional forecasts, based on an estimated vector autoregression model summarizing the prior experience,under predict short-term interest rates during this period....

The collapse in the 1980s of familiar relationships connecting money to either income or prices has thrown into question long-standing presumptions about the appropriate conduct of monetary policy. Once data from the 1980s are included, tests of several kinds -- including simple regression...

The rapidly growing net inflow of capital from abroad, mirroring the extraordinary deterioration of the U.S. export-import balance, has played a major role in equilibrating overall saving and investment in the United States in the face of unprecedentedly large and persistent federal goverriment...