Recently, several economists have argued that movements in the federal funds rate are a good proxy for changes in monetary policy. In this article, Nathan Balke and Kenneth Emery critically examine this view and the evidence supporting it. Using simple vector autoregressions, they find that...

Because the Federal Reserve is responsible for controlling the value of money, economic policymakers are very concerned with forecasting the public's demand for money. Inflation is one of several factors that have made forecasting the demand for money increasingly difficult over the past fifteen...