This paper develops a measure of the immediate effect on the federal funds rate of an open market operation. Because open market operations are often responses to current or anticipated economic developments, there is a serious problem of simultaneous equations bias in measuring this effect....

Adapted from a report prepared by the Open Market Group of the Federal Reserve Bank of New York and submitted to the Federal Open Market Committee by Peter D. Sternlight, Manager for Domestic Operations of the System Open Market Account.

A requirement for the study of macroeconomic behavior in the early 1980s is an understanding of the monetary policy pursued by the Federal Reserve and of the way this policy was implemented. In an attempt to fulfill this requirement, the formulation and implementation of monetary policy are...