Monetary policy and stability during six periods in US economic history: 1959–2008: a novel, nonlinear monetary policy rule

摘要

We investigate the monetary policy of the Federal Reserve Board during six periods in US economichistory 1959–2008. In particular, we examine the Fed’s response to changes in three guiding variables:inflation, π, unemployment, U, and industrial production, y, during periods with low and high economicstability. We identify separate responses for the Fed’s change in interest rate depending upon (i) the currentrate, FF, and the guiding variables’ level below or above their average values and (ii) recent movements ininflation and unemployment. The change in rate, FF, can then be calculated. We identify policies that bothincreased and decreased economic stability.