Learning about Policy from Federal Reserve History

For much of the past 15 years, my assistants and I have been reading minutes and papers in the National Archives, the Board of Governors, and the New York Federal Reserve Bank. I owe a debt of appreciation to the Board’s librarians, to the achivists at the New York bank, to my several assistants, and to many at the Fed who cooperated helpfully to make this project come to completion. The result has now been published in two volumes of more than 2,000 pages. Volume 1 covers the 1913–1951 period and has been in print several years (Meltzer 2003). Volume 2, published in February, is in two parts: part one (Meltzer 2010a) covers the 1951–69 period, and part two (Meltzer 2010b) chronicles the 1970–86 period. In this article, I discuss some principal findings from volume 2. The starting point is the 1951 Accord with the Treasury that permitted the long-term interest rate to rise above 2.5 percent. The closing point is the end of the Great Inflation in 1986.