IDEAS home Printed from https://ideas.repec.org/a/tpr/restat/v71y1989i3p385-93.html
   My bibliography  Save this article

The Evolution of Federal Reserve Credibility: 1978-1984

Author

Listed:
  • Hardouvelis, Gikas A
  • Barnhart, Scott W

Abstract

A random coefficients Kalman filter model of the response of commodity prices to weekly M1 announcements indicates a gradual evolution in the credibility of the Federal Reserve as an inflation fighter. The October 1979 announcement of a change in monetary policy aimed at reducing inflation did not result in an immediate increase in credibility, and the October 1982 announcement of a policy reversal did not diminish credibility. Credibility does vary with the underlying rate of inflation, which shows that markets pay attention to policy results not simply policy announcements. Copyright 1989 by MIT Press.

Suggested Citation

  • Hardouvelis, Gikas A & Barnhart, Scott W, 1989. "The Evolution of Federal Reserve Credibility: 1978-1984," The Review of Economics and Statistics, MIT Press, vol. 71(3), pages 385-393, August.
    • Handle: RePEc:tpr:restat:v:71:y:1989:i:3:p:385-93
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0034-6535%28198908%2971%3A3%3C385%3ATEOFRC%3E2.0.CO%3B2-0&origin=repec
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Huh, Chan G. & Lansing, Kevin J., 2000. "Expectations, credibility, and disinflation in a small macroeconomic model," Journal of Economics and Business, Elsevier, vol. 52(1-2), pages 51-86.
    2. Issler, João Victor & Soares, Ana Flávia, 2019. "Central Bank credibility and inflation expectations: a microfounded forecasting approach," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 812, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    3. Willem THORBECKE, 2017. "The Effect of the Fed's Large-scale Asset Purchases on Inflation Expectations," Discussion papers 17097, Research Institute of Economy, Trade and Industry (RIETI).
    4. Willem Thorbecke & Hanjiang Zhang, 2009. "Monetary Policy Surprises and Interest Rates: Choosing between the Inflation‐Revelation and Excess Sensitivity Hypotheses," Southern Economic Journal, John Wiley & Sons, vol. 75(4), pages 1114-1122, April.
    5. Willem THORBECKE, 2018. "Nonfarm Employment, Inflationary Expectations, and Monetary Policy after the Global Financial Crisis," Discussion papers 18076, Research Institute of Economy, Trade and Industry (RIETI).
    6. Granville, Brigitte & Zeng, Ning, 2019. "Time variation in inflation persistence: New evidence from modelling US inflation," Economic Modelling, Elsevier, vol. 81(C), pages 30-39.
    7. V. Vance Roley & Simon M. Wheatley, 1990. "Temporal Variation in the Interest-Rate Response to Money Announcements," NBER Working Papers 3471, National Bureau of Economic Research, Inc.
    8. Gabriel Caldas Montes & Caroline Cabral Machado, 2013. "Credibility and the credit channel transmission of monetary policy theoretical model and econometric analysis for Brazil," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 40(4), pages 469-492, August.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tpr:restat:v:71:y:1989:i:3:p:385-93. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kelly McDougall (email available below). General contact details of provider: https://direct.mit.edu/journals .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.