Describes three years after the Volcker monetary policy experiment. The Federal Reserve changed the focus by the operative procedure from an interest rate instrument to a reserve instrument and reaffirmed their commitment to beat its announced money growth target. At the same time Congress initiated widespread deregulation of financial institutions. The case encourages discussion about the best strategy and implementation of monetary policy, the impact of deregulation on their behavior, the cau … Read more »

Describes three years after the Volcker monetary policy experiment. The Federal Reserve changed the focus by the operative procedure from an interest rate instrument to a reserve instrument and reaffirmed their commitment to beat its announced money growth target. At the same time Congress initiated widespread deregulation of financial institutions. The case encourages discussion about the best strategy and implementation of monetary policy, the impact of deregulation on their behavior, the causes of the recession and inflation, and competitive position of impact of recent changes in monetary policy for competitive institutions.
«Hide

from
Michael G. Rukstad
Source: Harvard Business School
30 pages.
Publication Date: Aug 27, 1985. Prod #: 386055-PDF-ENG
Paul Volcker and the Federal Reserve – 1979-1982 HBR case solution

[related_post themes="flat"]