Appendix to Chapter 16

Fed Policy Procedures: Historical Perspective

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Historical Perspective I

• Discount policy and the real bills doctrine

• Discovery of open market operations

• The Great Depression

• Reserve requirements as a policy tool Thomas Amendment to the Agricultural Adjustment

Act of 1933

• War finance and pegging the interest rate

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Historical Perspective II

• Targeting money market conditions Procyclical monetary policy

• Targeting monetary aggregates

• New Fed operating procedures De-emphasis of federal funds rate

• De-emphasis of monetary aggregates Borrowed reserves target

• Federal funds targeting again Greater transparency

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International Considerations

• International policy coordination Plaza Agreement Louvre Accord

• Strength of dollar in international trade

• Worldwide financial crises