#1992-008A "Selecting an Intermediate Target Variable for Monetary Policy When the Goal is Price Stability"
by Michael T. Belongia, and Dallas S. Batten
September 1992

Conventional investigations of the "best" intermediate target variable for monetary policy have used a single criterion: the best fit between the behavior of an aggregate and that of some goal variable such as nominal spending or the aggregate price level. Ignored in this type of study, however, is the ability of the central bank to control the behavior of the aggregate which has the best fit relative to the goal variable. More...

#1992-007A "Government Policy and Banking Instability: Overbanking in the1920s"
by David C. Wheelock
October 1992

Excess capacity, or “overbanking,” was cited by contemporaries as leading cause of bank failure during the 1920s. Many states that had high numbers of banks per capita in 1920 had high bank failure rates subsequently. More...

PUBLISHED: Journal of Economic History, as "Government Policy and Banking Market Structure in the 1920s"

#1992-006B "Currency Appreciation and 'Deindustrialization': A European Perspective"
by John A. Tatom

Revised June 1994

During the 1980s, policy advisers were successful in promoting the view that movements in the value of the dollar have an inverse relationship to U.S. international competitiveness. This article explains their hypothesis, as well as the counterargument that exchange rates positively reflect a country?s competitiveness. Economic policies that boost competitiveness also raise the value of the domestic currency. More...

#1992-005A "Monetary and Exchange Rate Policy in Austria: An Early Example of Policy Coordination"
by John A. Tatom, Heinz Gluck, and Dieter Proske


This paper describes the evolution of Austrian exchange rate and monetary policy as an example of the benefits of policy coordination and credibility. This policy proved the performance of the Central Bank in achieving its twin objective of stabilizing the internal and external value of the currency. More...

PUBLISHED: Economic Policy Coordination in an Integrating Europe, 1992

#1992-004A "Why Do T-Bill Rates React to Discount Rate Changes"
by Daniel L. Thornton
March 1992

This paper investigates the hypothesis suggested by Cook and Hahn (1988) that the T-bill rates respond to the announcement of discount rate changes because the market takes discount rate changes to be a signal that the Fed has changed its target for the federal funds rate. Re-Interpreting Cook and Hahn's empirical evidence and using theirs and an alternative methodology, we show that the evidence cannot differentiate their hypothesis from a number of others that have been suggested in the literature. More...

PUBLISHED: Journal of Money, Credit, and Banking, November 1994

#1992-003A "The Market's Reaction to Discount Changes: What's Behind the Accouncement Effect?"
by Daniel L. Thornton


Market interest rates respond to discount rate changes. What is the reason for this response. This paper investigates several competing hypotheses of why markets respond to discount rate changes. More...

PUBLISHED: Journal of Banking and Finance, January 1998, 22(1), pp. 83-108

#1992-002A "The Slack Banker Dances: Deposit Insurance and Risk-Taking in the Banking Collapse of the 1920s"
by David C. Wheelock, and Subal C. Kumbhaker
January 1992

This paper studies the effects of deposit insurance on bank behavior using individual bank data from Kansas in the 1920s. Kansas banks were severely stressed by the collapse of agricultural prices in 1920 and resulting increase in farm mortgage defaults. More...

PUBLISHED: Explorations in Economic History, July 1994

#1992-001A "The P-Star Model and Austrian Prices"
by John A. Tatom
March 1992

In the P-star model the price level is determined by the money stock per unit of potential output and the long-run equilibrium level of the velocity of money. This article applies this model to Austria. Problems in identifying permanent shocks to potential output and/or velocity lead to the rejection of such models of the price level, but their first-difference version is not so suspect. More...

PUBLISHED: Empirica, 1992

#1991-002B "Nonlinearity and Chaos in Economic Models:Implications for Policy Decisions"
by James Bullard, and Alison Butler
July 1991
Revised August 1992

This survey paper discusses the policy implications that can be expected from the recent research on nonlinearity and chaos in economic models. Expected policy implications are interpreted as a driving force behind the recent proliferation of research in this area. More...

PUBLISHED: Economic Journal, July 1998