Monetary policy rules and the Great Inflation

Athanasios Orphanides

No 2002-8, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: The nature of monetary policy during the 1970s is evaluated through the lens of a forward-looking Taylor rule based on perceptions regarding the outlook for inflation and unemployment at the time policy decisions were made. The evidence suggests that policy during the 1970s was essentially indistinguishable from a systematic, activist, forward-looking approach such as is often identified with good policy advice in theoretical and econometric policy evaluation research. This points to the unpleasant possibility that the policy errors of the 1970s occurred despite the use of a seemingly desirable policy approach. Though the resulting activist policies could have appeared highly promising, they proved, in retrospect, counterproductive.

Keywords: Monetary policy; Inflation (Finance) (search for similar items in EconPapers)
Date: 2002
New Economics Papers: this item is included in nep-cba and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (232)

Downloads: (external link)
http://www.federalreserve.gov/pubs/feds/2002/200208/200208abs.html (text/html)
http://www.federalreserve.gov/pubs/feds/2002/200208/200208pap.pdf (application/pdf)

Related works:
Journal Article: Monetary-Policy Rules and the Great Inflation (2002)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2002-8

Access Statistics for this paper

More papers in Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.) Contact information at EDIRC.
Bibliographic data for series maintained by Ryan Wolfslayer ; Keisha Fournillier ().