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Conducting Monetary Policy Without Government Debt: The Fed's Early Years

Resource Type
Dataset : survey data
  • Wheelock, David C. (Federal Reserve Bank of St. Louis)
Other Title
  • Version 1 (Subtitle)
Publication Date
Free Keywords
government securities; Great Depression (1929); monetary policy; national debt; national economy; securities
  • Abstract

    The Federal Reserve implements its monetary policy by using open market operations in United States government securities to target the federal funds rate. A substantial decline in the stock of United States Treasury debt could interfere with the conduct of monetary policy, possibly forcing the Fed to rely more heavily on discount window lending or to conduct open market transactions in other types of securities. Either choice would cause the implementation of monetary policy to resemble the methods used by the Fed before World War II. This paper describes two things: (1) how the Fed implemented monetary policy before the war and (2) the conflicts that arose within the Fed over the allocation of private-sector credit when discount window loans and Fed purchases of private securities were a substantial component of Federal Reserve credit. Those conflicts help explain the Fed's failure to respond vigorously to the Great Depression. The experience suggests that a renewed reliance on the discount window or on open market operations in securities other than those issued by the United States Treasury could hamper the conduct of monetary policy if it leads to increased pressure on the Fed to affect the allocation of credit.
  • Table of Contents


    • DS1: Dataset
Geographic Coverage
  • United States
Collection Mode
  • The file submitted is 0205dwd.txt. These data are part of ICPSR's Publication-Related Archive and are distributed exactly as they arrived from the data depositor. ICPSR has not checked or processed this material. Users should consult the investigator if further information is desired.

This study is freely available to the general public via web download.
Alternative Identifiers
  • 1259 (Type: ICPSR Study Number)
  • Wheelock, David C.. Conducting monetary policy without government debt: The Fed's early years. Federal Reserve Bank of St. Louis Review.84, (3), 1-14.2002.

Update Metadata: 2015-08-05 | Issue Number: 6 | Registration Date: 2015-06-15

Wheelock, David C. (2003): Conducting Monetary Policy Without Government Debt: The Fed's Early Years. Version 1. Version: v1. ICPSR - Interuniversity Consortium for Political and Social Research. Dataset.