The birth of modern monetary policy

For many years, the Fed has used influence on short-term interest rates to contain inflationary pressure in the US economy and promote growth and employment. The genesis of this approach and its theoretical foundation both lie in the work of Knut Wicksell, one of the 20th century's more colourful and eclectic economists, Dallas Fed president Bob McTeer says in the introduction to the latest edition of "Economic Insights".

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