BEA Web site Financial variables Federal funds rate Federal Funds Effective Rate, Release H:15 BOG Web site Nonborrowed reserves Nonborrowed Reserves
Plus Extended Credit, Seasonally Adjusted, Adjusted for Changes in Reserve Requirements, Release H:3 BOG Web site Reserves Total Reserves, Seasonally Adjusted, Adjusted for Changes in Reserve Requirements, Release H:3 BOG Web site
The chart depicts the usual downward-sloping demand schedule and an inelastic supply schedule set at the level of nonborrowed reserves
, or NBR (recall that there is almost zero discount-window borrowing at present).
To explore this further, we compute the correlations using growth in real per capita nonborrowed reserves
, which is probably a closer indicator of policy stance than growth in the monetary base, for 1959-99--the period over which we have a series for nonborrowed reserves
Changes in banks' demand for reserves are then met by the provision of nonborrowed reserves
through open-market operations in U.
According to the Federal Reserve plan, estimates for nonborrowed reserves
will largely determine what the Fed does as it tries to hit its desired monetary growth rate.
With the announcement on October 6, 1979, of the switch from interest-rate targeting to nonborrowed reserves
The model uses term structure relations to describe linkages from short to long rates and can be simulated with either the federal funds rate or nonborrowed reserves
as the exogenous policy variable.
Rather, he attributes the velocity decline, in part, to the unprecedented volatility of money growth following the Federal Reserve's 1979 shift to targeting nonborrowed reserves
This monetarist argument was rejected by FOMC staff, which drew on a different strand of the literature to recommend nonborrowed reserves
as the primary alternative operating target to the federal funds rate.
10) As an alternative, we start the second sample in 1984:1 to eliminate the nonborrowed reserves
targeting experiment from the second sample.
The model employed comprises output, the price level, commodity prices, and three reserves market variables: total reserves, nonborrowed reserves
, and the federal funds rate.
For example, the 1979-82 period is often regarded as one in which the policy "rule" was completely changed because the Federal Reserve adopted new operating procedures to target nonborrowed reserves
rather than the federal funds rate.