Review

This article presents a brief history of deposit interest rate ceilings in the United States and their effects. It then describes the process established by recent legislation for eliminating ceilings and its likely impact on the interest rates.

This article has three basic themes. First, the structure of the St. Louis Model (used for years at the St. Louis Fed to provide alternate scenarios for the response of inflation, output, and the unemployment rate under different monetary policy assumptions) can be simplified and its predictive performance improved.