Abstract
Except for relatively short episodes, the most notable of which is the 1979–1982 period, the Fed has geared monetary policy to reduce fluctuations in short-term interest rates. Even Volcker’s successful monetary experiment did not produce a permanent shift to a nominal money stock rule as advocated by monetarists. This is puzzling for several reasons, not the least of which is the fact that monetarists’ prescriptions have proven to be effective in delivering price stability. The tendency to revert to a policy of interest rate smoothing seems to be rather tenacious and as old as the Fed.
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Cukierman, A. (1991). Why Does the Fed Smooth Interest Rates?. In: Belongia, M.T. (eds) Monetary Policy on the 75th Anniversary of the Federal Reserve System. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-3888-8_6
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DOI: https://doi.org/10.1007/978-94-011-3888-8_6
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