The Incredible Volcker Disinflation / Marvin Goodfriend, Robert King.

Format:

Book

Author/Creator:

Goodfriend, Marvin.

Contributor:

National Bureau of Economic Research.

King, Robert.

Series:

Working Paper Series (National Bureau of Economic Research) no. w11562.

NBER working paper series no. w11562

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2005.

Summary:

Using a simple modern macroeconomic model, we argue that the real effects of the Volcker disinflation in the early 1980s were mainly due to imperfect credibility, evident in volatility and stubbornness of long-term interest rates. Studying recently released transcripts of the Federal Open Market Committee, we find -- to our surprise -- that Volcker and other FOMC members also regarded long-term interest rates as key indicators of inflation expectations and of their disinflationary policy's credibility. We also consider the interplay of monetary targets, operating procedures, and credibility during the Volcker disinflation.

Notes:

Print version record

August 2005.