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"Estimated Effects of the October 1979 Change in Monetary Policy on the 1980 Economy," The American Economic Review, May 1981, 160-165.
pdf file (443KB).

Abstract

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Comments

This paper is the beginning of my attempt to modify the interest rate reaction function presented in 1978#5 for the switch in monetary policy in October 1979. In this paper I used three dummy variables. In later work I switched to the use of one dummy variable multiplied by the lagged growth of the money supply, which is the specification in the current version of the US model (see equation 30). This paper presents estimates of the effects of the monetary switch on the economy. The method developed in 1980#2 is used to estimate standard errors of the estimated effects.