Title: The great inflation of the seventies
Description: "This paper revisits the issue of what factors motivated the macroeconomic policies that led to the Great Inflation of the 1970s.  A satisfactory explanation must be consistent with (1) the estimated monetary policy reaction function; (2) the timing patterns relating monetary policy developments and inflation; and (3) the record of economic views (manifested in statements by policymakers and prominent financial commentators).  It is argued that the monetary policy neglect hypothesis--which claims that policymakers took a nonmonetary view of the inflation process--meets all three criteria.  Other explanations are ruled out, with one exception (the output gap mismeasurement hypothesis), which supplements the monetary policy neglect hypothesis.  This conclusion is based on a study of the Great Inflation in both the U.K. and the U.S., and draws on both quantitative and archival evidence, particularly news coverage"--Federal Reserve Bank of St. Louis web site.
Subjects: History, Inflation (Finance), Monetary policy, Inflation (FInance)
Places: United States