Before the Accord: U.S. Monetary-Financial Policy 1945-51

   (330 K)

Thia paper analyzes U.S. monetary-financial policy in the period leading up to the Treasury-Fed Accord. We model policy as an implicit target zone for the price level and an explicit zone for interest rates, and the difficulties on the eve of the Accord as an incipient run on a collapsing target-zone regime. The regime was implemented to maintain the stability of the financial system in a period when there was a serious maturity mismatch between the assets and liabilities of the banking system.

Published:

• Reprinted in Deutsche Bank Emerging Markets, April 1999. ,
• Before the Accord: U.S. Monetary-Financial Policy, 1945-51, Barry Eichengreen, Peter M. Garber, in Financial Markets and Financial Crises (1991), University of Chicago Press
  

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