Rise and Fall of a Policy Rule: Monetarism at the St. Louis Fed, 1968-1986 (ICPSR 1235)

Version Date: Apr 2, 2001

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Principal Investigator(s):
R.W. Hafer, Federal Reserve Bank of St. Louis; David C. Wheelock, Federal Reserve Bank of St. Louis

https://doi.org/10.3886/ICPSR01235.v1

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Summary

From the 1960s to the 1980s, the Federal Reserve Bank of St. Louis played an important and highly visible role in the development and advocacy of stabilization policy based on the targeting of monetary aggregates. Research conducted at the St. Louis Bank extended earlier monetarist analysis that had focused on the role of money in explaining economic activity in the long run. Their success in finding apparently robust, stable relationships in both long- and short-run data led monetarists to apply long-run propositions to short-run policy questions, effectively competing with alternative views of the time. When the short-run correlation between money and economic activity went astray in the early 1970s, however, the efficacy of the monetarist rule and appeals for targeting monetary aggregates to achieve economic stabilization quickly lost credibility. This article traces the evolution of monetary policy research at the Federal Reserve Bank of St. Louis as it moved from the identification of long-run relationships between money and economic activity toward short-run policy analysis. The authors show how monetarists were lulled into advocating a short-run stabilization policy and argue that this experience counsels against overconfidence in our ability to identify infallible rules for conducting short-run stabilization policy in general.

Citation

Hafer, R.W., and Wheelock, David C. Rise and Fall of a Policy Rule:  Monetarism at the St. Louis Fed, 1968-1986. Inter-university Consortium for Political and Social Research [distributor], 2001-04-02. https://doi.org/10.3886/ICPSR01235.v1

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Subject Terms

Distributor(s)

Inter-university Consortium for Political and Social Research
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Time Period(s)

1968 -- 1986

Data Collection Notes

  1. The file submitted is the data file, 0101dwd.txt.

  2. These data are part of ICPSR's Publication-Related Archive and are distributed exactly as they arrived from the data depositor. ICPSR has not checked or processed this material. Users should consult the investigators if further information is desired.

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Original Release Date

2001-04-02

Version History

2018-02-15 The citation of this study may have changed due to the new version control system that has been implemented. The previous citation was:
  • Hafer, R.W., and David C. Wheelock. Rise and Fall of a Policy Rule: Monetarism at the St. Louis Fed, 1968-1986. ICPSR01235-v1. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2001-04-02. http://doi.org/10.3886/ICPSR01235.v1
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Notes

  • These data are flagged as replication datasets and are distributed exactly as they arrived from the data depositor. ICPSR has not checked or processed this material. Users should consult the investigator(s) if further information is desired.

  • The public-use data files in this collection are available for access by the general public. Access does not require affiliation with an ICPSR member institution.