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March/April 2005, Part 2

Reflections on Monetary Policy 25 Years After October 1979

Posted 2005-04-15

Contributing Authors

Author names and contact information.

Posted 2005-04-15

Chairman's Remarks

by Alan Greenspan

In his remarks at the conference, the Chairman of the Federal Reserve notes that the policy change initiated under the leadership of Chairman Paul Volcker rescued our nation’s economy from a dangerous path of ever-escalating inflation and instability.

Posted 2005-04-15

Editors' Introduction

by Athanasios Orphanides and Daniel L. Thornton

An overview of this Review issue.

Posted 2005-04-15

Origins of the Great Inflation

by Allan H. Meltzer

The Great Inflation from 1965 to 1984 is the climactic monetary event of the last part of the 20th century. The author analyzes why it started and why it continued for many years. Like others, he attributes the start of inflation to analytic errors, particularly the widespread acceptance of the simple Keynesian model with its implication that monetary and fiscal policy should be coordinated.

Posted 2005-04-15

Commentary on "Origins of the Great Inflation"

by Christina D. Romer

Commentary on "Origins of the Great Inflation" by Allan H. Meltzer.

Posted 2005-04-15

The Reform of October 1979: How It Happened and Why

by David E. Lindsey, Athanasios Orphanides, and Robert H. Rasche

This article offers a historical review of the monetary policy reform of October 6, 1979, and discusses the influences behind it and its significance. 

Posted 2005-04-15

Commentary on "The Reform of October 1979: How It Happened and Why"

by Stephen H. Axilrod

Commentary on "The Reform of October 1979: How It Happened and Why" by David E. Lindsey, Athanasios Orphanides, and Robert H. Rasche.

Posted 2005-04-15

The Monetary Policy Debate Since October 1979: Lessons for Theory and Practice

by Marvin Goodfriend

Monetary theory and policy have been revolutionized in the two decades since October 1979, when the Federal Reserve under the leadership of Paul Volcker moved to stabilize inflation and bring it down. On the side of practice, the decisive factor was the demonstration that monetary policy could acquire and maintain credibility for low inflation, and improve the stability of both inflation and output relative to potential.

Posted 2005-04-15

Commentary on "The Monetary Policy Debate Since October 1979: Lessons for Theory and Practice"

by Laurence M. Ball

Commentary on "The Monetary Policy Debate Since October 1979: Lessons for Theory and Practice" by Marvin Goodfriend.

Posted 2005-04-15

The International Implications of October 1979: Toward a Long Boom on a Global Scale

by John B. Taylor

The author discusses the international implications of the momentous event of October 1979 in the United States and the powerful lessons learned.

Posted 2005-04-15

Panel Discussion I: What Have We Learned Since October 1979?

by Ben S. Bernanke, Alan S. Blinder, and Bennett T. McCallum

Ben S. Bernanke focuses on some lessons economists have drawn from the Volcker regime regarding the importance of credibility in central banking and how that credibility can be obtained. 

Posted 2005-04-15

Panel Discussion II: Safeguarding Good Policy Practice

by Roger W. Ferguson Jr., Charles A. E. Goodhart, and William Poole

Roger W. Ferguson Jr. focuses on two issues: (i) what constitutes good monetary policy practice, with a review of the Federal Reserve’s record in satisfying its mandates in recent decades, and (ii) how good policy outcomes come about. Charles A.E. Goodhart discusses ...

Posted 2005-04-15

Reflections:

Reflections on the October 6, 1979, Meeting of the FOMC

by Robert P. Black

The author provides a first-hand account of the decision made at the October 6, 1979, FOMC meeting and the subsequent developments.

Posted 2005-04-15

Reflections:

Personal Recollections

by Philip E. Coldwell

The author provides personal recollections of the policy discussions in the years leading up to August 1979.

Posted 2005-04-15

Reflections:

Reflection on the FOMC Meeting of October 6, 1979

by Joseph H. Coyne

The author, a non-economist, discuses day-to-day experiences that flowed from the October 6, 1979, FOMC meeting.

Posted 2005-04-15

Reflections:

Reflections on October 6, 1979, and Its Aftermath

by Charles Freedman

How the economic and financial developments in the United States importantly influenced the Canadian economy and policymaking in Canada.

Posted 2005-04-15

Reflections:

What Remains from the Volcker Experiment?

by Benjamin M. Friedman

The author discusses how the world of monetary policymaking in the United States has been somehow different since 1979, what exactly is different, and in what respects those differences stem from the innovations introduced in 1979.

Posted 2005-04-15

Reflections:

Why Did the Great Inflation Not Happen in Germany?

by Otmar Issing

The author discusses possible reasons the United States suffered from the Great Inflation but Germany did not, reasons for this outcome for Germany, and lessons to be drawn from such experiences.

Posted 2005-04-15

Reflections:

The International Consequences of the 1979 U.S. Monetary Policy Switch: The Case of Switzerland

by Georg Rich

The author discusses how fundamental changes in U.S. monetary policy in October 1979 were welcomed by key officials in the Swiss National Bank.

Posted 2005-04-15

Reflections:

The Changing Role of the Federal Reserve

by Frederick H. Schultz

The author discusses how the almost universal agreement developed that the U.S. budget should be in surplus and that the Federal Reserve that should be flexible in monetary policy in order to respond to changes in the economy.

Posted 2005-04-15

Reflections:

Aftermath of the Monetarist Clash with the Federal Reserve Before and During the Volcker Era

by Anna J. Schwartz

The author reviews past monetarist strictures (Shadow Open Market Committee, 1974-1982) and whether current Federal Reserve practice provides a satisfactory response to them.

Posted 2005-04-15

Reflections:

Reflections

by Edwin M. Truman

The author discusses how the FOMC decision on October 6, 1979, was very much part of an international policy coordination process that played out with our partners abroad, principally in Europe, as well as within the U.S. government, in the late 1970s.