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U.S. Monetary Policy During the 1990s

N. Gregory Mankiw ()

No 8471, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper discusses the conduct and performance of U.S. monetary policy during the 1990s, comparing it to policy during the previous several decades. It reaches four broad conclusions. First, the macroeconomic performance of the 1990s was exceptional, especially if judged by the volatility of growth, unemployment, and inflation. Second, much of the good performance was due to good luck arising from the supply-side of the economy: Food and energy prices were well behaved, and productivity growth experienced an unexpected acceleration. Third, monetary policymakers deserve some of the credit by making interest rates more responsive to inflation than was the case in previous periods. Fourth, although the 1990s can be viewed as an example of successful discretionary policy, Fed policymakers may have been engaged in 'covert inflation targeting' at a rate of about 3 percent. The avoidance of an explicit policy rule, however, means that future policymakers inherit only a limited legacy.

JEL-codes: E5 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mon and nep-pke
Date: 2001-09
Note: EFG ME
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Citations: View citations in EconPapers (13) Track citations by RSS feed

Published as Frankel, Jefrey and Peter Orszag (eds.) American Economic Policy in the 1990s. Cambridge, MA: MIT Press, 2002.

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