Allan Meltzer and the Search for a Nominal Anchor

Bullard, James B.

doi:10.20955/r.2018.117-26

Cited by 2 publications

(3 citation statements)

References 36 publications

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“…Legislation in the 1970s rolled along that Congress and gave the Fed the framework of what would later be known as a "dual mandate," 2 through the "Federal Reserve Reform Act of 1977" 3 and the "Full Employment and Balanced Growth Act of 1978 (Humphrey-Hawkins)". 4 That might come as a surprise to some consumers, given just how much the Fed stresses that it decides what to do with interest rates without political interference.…”

Section: Introductionmentioning

confidence: 99%

“…The Fed's dual mandate, explained, and why officials could soon face an impossible choice." The Federal Reserve's Dual Mandate And Why It's Often Dueling | Bankrate 3 See, "Federal Reserve Reform Act of 1977". This act was Signed by President Jimmy Carter on November 16, 1977, this amendment to the Federal Reserve Act was instrumental in shaping the current Fed.…”

Section: Introductionmentioning

confidence: 99%

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Fed’s Dual Mandate: Maximum Employment and Price Stability

Kallianiotis

2024

Journal of Applied Finance &Amp; Banking

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In this paper, we look at the dual mandate (price stability and maximum employment) as policy objectives of the central bank (the Fed) and we test mostly the effectiveness of policy instruments on these two ultimate objectives. We start from 1978 to 2008 and then, from 2009 (the year of major changes in monetary policy) to present to measure statistically the capability of the Fed to improve the economy’s cycle and citizens’ wellbeing. OLS and VAR models and at the end some measurements of correlations and causality are used to determine the effectiveness of the policy tools on the two objective variables, price and unemployment. The empirical results show that prices have been drastically affected (inflation and bubbles) by this expansionary monetary policy for so many years, but employment has not been improved. In general, our public policies have generated a social cost that exceeds the social benefits. JEL classification numbers: E52, E58, E4, E44, C52, D6. Keywords: Monetary Policy, Central Banks and Their Policies, Money and Interest Rates, Financial Markets and the Macro-economy, Model Evaluation and Testing, Social Welfare.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Fed’s Dual Mandate: Maximum Employment and Price Stability

Kallianiotis

2024

Journal of Applied Finance &Amp; Banking

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“… See, Kallianiotis (2019).3 See, Bindseil (2016),Gavin (2018),Bullard (2018), and Kallianiotis (2023). 4Policy Tools.…”

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The Questionable Effectiveness and Efficiency of the New Public Policies

N. Kallianiotis

2023

IJEBMR

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In this paper we deal with the recent (1995-2023) Federal Reserve operated monetary policies, which were two unprecedented and distinct monetary policy regimes. The inflation stabilization era (1995-2008) and the zero-interest rate era (December 15, 2008-December 15, 2015) and again (March 15, 2020-March 15, 2022).These different monetary policy regimes provided various outcomes for interest rates, financial markets, inflation, cost of living, employment, international trade, and real economic growth. Then, a new fiscal policy was imposed in 2020. Some of the important results are that monetary policy appears to be able to affect long-term real interest rates, risk, the prices of the financial assets (bubbles), and very little the real economic growth. The Fed’s interest rate target was set during these nine years at 0% to 0.25%.It has created a low level of long-term interest rates and the negative real rate of interest (cost of capital). The evidence suggests that these public policies are not very effective; they have created a new bubble in the financial market, future inflation, and a redistribution of wealth from riskaverse savers to banks and risk-taker speculators. This monetary policy has increased the risk (RP) to the risk-averse depositors by making the real rate of interest negative. The effects on growth and employment of both public policies (monetary and fiscal) were gradual, small, and questionable, due to exaggerated liquidity, outsourcing, COVID-19, liberalism, high cost of production, the “environment”, enormous debts, and unfair trade policies.

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Allan Meltzer and the Search for a Nominal Anchor

Cited by 2 publications

References 36 publications

Fed’s Dual Mandate: Maximum Employment and Price Stability

Fed’s Dual Mandate: Maximum Employment and Price Stability

The Questionable Effectiveness and Efficiency of the New Public Policies

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