Most central banks, including the U.S. Federal Reserve System, implement their monetary policy by setting interest rates. This paper reviews the major changes that have taken place along the way from the Federal Reserve's interest rate-based policy structure of the 1960s to the interest...

The threat to monetary policy from the electronic revolution in banking is the possibility of a decoupling' of the operations of the central bank from markets in which financial claims are created and transacted in ways that, at some operative margin, affect the decisions of households and firms...

A familiar question raised by the Federal Reserve System's evolving use of money growth targets over the past twenty years is whether monetary policymakers had sound economic reasons for changing their procedures as they did -- either in adopting money growth targets in the first place, or in...

The predominant weight of the existing evidence suggests that the effects of monetary policy on real economic activity are systematic, significant, and sizeable. Yet questions remain, both about individual empirical results and, more broadly, about the different methodological approaches that...

Institutional investors, including especially pension funds and mutual funds, are steadily replacing individuals as owners of equity shares in the United States. Forty years ago individual investors owned 90% of all equity shares outstanding. Today the individually owned share is just 50%. The...

Conventional monetary policy rules based on intermediate targets, like the growth of money or credit, rest on the presumption that relationships correcting these variables to key measures of nonfinancial economic activity like income and prices are robust. When financial markets change in such a...

This paper draws six observations from the U.S. fiscal policy actions of the 1980s and their apparent macroeconomic aftermath. in each case focusing on implications for familiar debates about economic behavior: (1) Across-the-board cuts in personal income tax rates reduced the government's tax...

This paper argues that the distinctions among different current theories of the business cycle do not have the force usually assumed in their behalf in discussions of macroeconomic policy. The distinction between aggregate demand and aggregate supply as the principal location of the disturbances...

A review of major lines of thinking about developments in the 1980s bearing on the likelihood of a financial crisis in the United States supports four principal conclusions:<br>First, financial crises have historically played a major role in large fluctuations in business activity. A financial...

Major changes have taken place in the U.S. economy within the past quarter century. Changes with implications that are at least potentially important for the effect of monetary policy on real economic activity include the elimination of Regulation Q interest ceilings and the development of the...