1. Appendix to Chapter 16 Fed Policy Procedures: Historical Perspective

2. Copyright © 2007 Pearson Addison-Wesley. All rights reserved. 16A-2 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

3. Copyright © 2007 Pearson Addison-Wesley. All rights reserved. 16A-3 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

4. Copyright © 2007 Pearson Addison-Wesley. All rights reserved. 16A-4 International Considerations International policy coordination  Plaza Agreement  Louvre Accord Strength of dollar in international trade Worldwide financial crises