Michael T. Belongia finds that the large and rapidly expanding surplus of dairy products in the United States can be traced directly to the production incentives offered by the dairy price support program. He shows, by applying elementary economic principles, why effective price supports will create surplus production and, moreover, why the surplus will grow over time if limits are not placed on production.
A. Steven Holland investigates the relationship between the rate of inflation and the level of inflation uncertainty. He cites evidence from previous studies of this relationship and discusses the theoretical arguments concerning the likely consequences of greater inflation uncertainty on the economy.
R. Alton Gilbert describes how the method of calculating this Bank’s adjusted monetary base is modified to reflect the timing of reserve accounting under contemporaneous reserve requirements. One important result of the change is that the reserve adjustment magnitude (RAM), the component of the adjusted monetary base that measures the effects of changes in reserve requirements, must be estimated for the most recent weekly observations.
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