A comparison of the Fed's efforts to restore price stability in the 1920s and 1980s shows that considerable progress was made in both periods, despite the absence of an explicit, unambiguous price stability mandate at either time. Whereas the existence of the gold standard reinforced and...

Economic theory teaches that higher trend productivity growth requires higher real interest rates to maintain balance between aggregate demand and supply and so prevent the emergence of inflation. The challenge for monetary policy is to determine when and by how much real rates should rise. An...

Since 1981, banking industry consolidation has been striking, including recent megamergers that will change the face of the industry. Without the elimination of in-state and interstate branching restrictions, the merger wave would have been impossible, but the underlying force behind the wave...

Credibility for low inflation is the cornerstone of an effective monetary policy. And public support for Fed independence is the foundation of that credibility. Fed intervention in foreign exchange markets creates doubt about whether monetary policy will pursue low inflation or exchange rate...

The central purpose of bank regulation is to protect the actuarial soundness of the federal safety net – deposit insurance, discount window lending, and the Fed's oversight of the payments system. Some regulatory changes could improve current banking policy by reducing regulatory burden while...

This article discusses a technical aspect of the Federal Reserve's monetary targeting procedure that has come to be known as "base drift." The Fed has been announcing larger ranges for the growth of M1 and other monetary aggregates since 1975. These ranges have been expressed in terms of rates...

The purpose of this paper is to describe recent financial innovation in the United States, outline its principal implications with regard to (1) the structure and behavior of financial markets and (2) the conduct of monetary policy, and speculate on the likely character of further innovation in...

This article discusses a technical aspect of the Federal Reserve's monetary targeting procedure that has come to be known as “base drift.” The Fed has been announcing target ranges for the growth of M1 and other monetary aggregates since 1975. These ranges have been expressed in terms of...

The purpose of this paper is to describe recent financial innovation in the United States, outline its principal implications with regard to (1) the structure and behavior of financial markets and (2) the conduct of monetary policy, and speculate on the likely character of further innovation in...