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>I presume Wallis is talking about the change in the Fed's
>procedures with Fed chairman Volcker's "monetarist experiment".
>Prior to that the Fed had mostly aimed to stabilize interest
>rates around some target level. This implied that if government
>debt issues tended to raise interest rates, the Fed would
>respond with open-market operations to increase money stock and
>prevent (or at least damp) the rise in rates.
Allin, thank you much for this clarifying response. One more question if
you do not mind:Do you think Wallis is correct to argue that war time
monetary policy did last until 1979. That is, the Fed continued until then
to ensure that the price of bonds be maintained at par through such open
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