The measures of real GDP and inflation are aggregates of many individual prices and quantities. These variables are measured using fixed-weight indexes, which can give a misleading impression of price and output changes in a particular year if the structures of output and relative prices are...

Given doubts about the reliability of the monetary aggregates as intermediate targets of monetary policy, the Federal Reserve attempts to meet its dual goals--gradual reduction of inflation and mitigation of cyclical downturns in output--through purely discretionary adjustments of an interest...