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September/October 1994, 
Vol. 76, No. 5
Posted 1994-09-01

A Case Study in Monetary Control: 1980-82

During the three years ending in the fall of 1982, the Federal Reserve implemented the monetary policy decisions of the Federal Open Market Committee (FOMC) by targeting nonborrowed reserves. Policymakers described this change in the operating procedure as an attempt to improve monetary control. This three-year experience with nonborrowed reserves targeting has generated a great deal of analysis by economists. R. Alton Gilbert investigates whether the record of policy actions during this period reflected a consistent attempt to hit short-run objectives for money growth, given the confidential information available then to policymakers: staff projections of total reserves over periods between FOMC meetings, and staff estimates of the level of total reserves that would be consistent with the objectives of the FOMC for money growth.