| Limited Reserves 1983 - 1993 |
| Steven M. Reff Economics Lecturer University of Arizona (2007 - 2016) The 2015 University of Arizona Five-Star Faculty Award |
In October 1982, targeting the quantity of money ended and the Fed
went back to targeting the price of reserves, known as the Federal
FundsTARGET rate. This concept of Federal Funds TARGET Rate
is important in a limited reserves framework and the concept of
EFFECTIVE Federal Funds Rate (FFR) is important in an ample
reserves framework or regime.
went back to targeting the price of reserves, known as the Federal
FundsTARGET rate. This concept of Federal Funds TARGET Rate
is important in a limited reserves framework and the concept of
EFFECTIVE Federal Funds Rate (FFR) is important in an ample
reserves framework or regime.
Again, students in an introductory, college-level macroeconomic course
DO NOT have to know this lesson, but for Macroeconomics Educators,
this is a good lesson on limited reserves' terminology that will be used
throughout the next lesson on Limited Reserves 1993 - 2003.
DO NOT have to know this lesson, but for Macroeconomics Educators,
this is a good lesson on limited reserves' terminology that will be used
throughout the next lesson on Limited Reserves 1993 - 2003.
Money Market Graph (1979 - 1982)
Shown below is a one-minute video of Alan Greenspan speaking before
Congress in 1993. If this video does not make you believe the Money
Market graph is sunk, done and over with, and irrelevant to monetary
policy moving forward, then no other words will make you believe any
differently.
ENLARGE THE YOUTUBE VIDEO BELOW:
Congress in 1993. If this video does not make you believe the Money
Market graph is sunk, done and over with, and irrelevant to monetary
policy moving forward, then no other words will make you believe any
differently.
ENLARGE THE YOUTUBE VIDEO BELOW:
Limited Reserves Graph (1983 - 2003)
This lesson is for Macroeconomics Educators who want to get a
better understanding of the Limited Reserves Framework (shown on
the graph on the right) after the end of the Volcker Shock of targeting
the quantity of money in late 1982 (shown on the graph on the left).
Notice on the Limited Reserves Graph, U.S. monetary policy returned
to targeting the price of reserves from 1983 - 2003.
This lesson, though, is only for the period of time of 1983 - 1993.
better understanding of the Limited Reserves Framework (shown on
the graph on the right) after the end of the Volcker Shock of targeting
the quantity of money in late 1982 (shown on the graph on the left).
Notice on the Limited Reserves Graph, U.S. monetary policy returned
to targeting the price of reserves from 1983 - 2003.
This lesson, though, is only for the period of time of 1983 - 1993.
Shown below is a 6-minute YouTube video explaining the
Federal Funds TARGET Rate from 1983 - 2003.
ENLARGE THE YOUTUBE VIDEO BELOW:
Federal Funds TARGET Rate from 1983 - 2003.
ENLARGE THE YOUTUBE VIDEO BELOW: