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April 1983, 
Vol. 65, No. 4
Posted 1983-04-01

Weekly Money Supply Forecasts: Effects of the October 1979 Change in Monetary Control Procedures

by R. W. Hafer

R. W. Hafer focuses on the predictions of weekly money growth that financial analysts use in attempting to anticipate Federal Reserve policy actions. Although several studies have shown the weekly M1 numbers to be unreliable predictors of long-term policy trends, weekly predictions of M1 frequently are used to determine short-term financial market strategies. In “Weekly Money Forecasts,” Hafer examines whether the October 6, 1979, change in the Federal Reserve’s procedures to control the money supply affected the forecasters’ abilities to predict the change in M1. More specifically, he addresses the issue of whether the change in operating procedures affected the unbiased and efficiency characteristics of these M1 forecasts.