Monetary Policy Uncovered, Flying Blind: The FederalReserve's Experiment with Unobservables

Dimitri Papadimitriou and L. Randall Wray

Economics Public Policy Brief Archive from Levy Economics Institute

Abstract: Experience with a variety of targets has cast doubt on the likelihood that a single variable can be found to be closely and reliably linked to future inflation; it is even less likely that such a variable, should it be found, would somehow be under the control and manipulation of the Federal Reserve. Papadimitriou and Wray review the experiments with various targets undertaken by former Fed chairman Paul Volcker and current chairman Alan Greenspan. The authors contend that there is no reason to suppose that the Fed will discover a target variable whose control will yield stable prices. Finally, they conclude that economists lack sufficient information to calculate the costs of achieving stable prices in terms of unemployment and lost output.

References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.levyinstitute.org/pubs/ppb15.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.levyinstitute.org/pubs/ppb15.pdf [301 Moved Permanently]--> https://levyweb.bard.edu/pubs/ppb15.pdf)

Related works:
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:lev:levppb:ppb_15

Access Statistics for this paper

More papers in Economics Public Policy Brief Archive from Levy Economics Institute
Bibliographic data for series maintained by Elizabeth Dunn (edunn@levy.org this e-mail address is bad, please contact repec@repec.org).