Federal Reserve Behavior Since 1980: a Financial Markets Perspective

24 Pages Posted: 23 Apr 2004 Last revised: 19 Aug 2022

See all articles by William C. Melton

William C. Melton

Independent

V. Vance Roley

University of Hawaii at Manoa - Shidler College of Business; National Bureau of Economic Research (NBER)

Date Written: June 1988

Abstract

The financial market's understanding of Federal Reserve behavior is used to examine recent changes in monetary policy. Changes in the level of interest rats in response to specific types of economic information are primarily considered. Differences in the volatility of interest rates across period provide additional evidence on changes in monetary policy regimes. The results indicate that monetary policy changed several times since 1980 with respect to either the Federal Reserve's targets, its desire to achieve its targets, or its operating procedures. The different regimes correspond to Federal Reserve statements about changes in policy. In this context, then, the evidence suggests that policy was credible.

Suggested Citation

Melton, William C. and Roley, V. Vance, Federal Reserve Behavior Since 1980: a Financial Markets Perspective (June 1988). NBER Working Paper No. w2608, Available at SSRN: https://ssrn.com/abstract=428352

William C. Melton

Independent

V. Vance Roley (Contact Author)

University of Hawaii at Manoa - Shidler College of Business ( email )

2404 Maile Way
Honolulu, HI 96822
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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