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The Reform of October 1979: How It Happened and Why
This study offers a historical review of the monetary policy reform of October 6, 1979. It lays out the historical record from the start of 1979 through the spring of 1980, relying almost exclusively upon contemporaneous sources, including the transcripts of Federal Open Market Committee (FOMC) meetings during 1979. It then presents and discusses reasons for the FOMC’s adoption of the reform. Next, it looks at the communications challenge presented to the Committee during this period and asks whether “What We Have Here Is a Failure to Communicate!” Or Not! Finally, it asks Was Chairman Volcker…A Monetarist? A Nominal Income Targeter? A New, Neo, or Old-Fashioned Keynesian? An Inflation Targeter? or A Great Communicator?