Whose Bank is it Anyway? The Importance of Unemployment and the Stock Market for Monetary Policy
Author(s)
Weller, Christian E.
Abstract
Prior research suggests that the Fed has consistently targeted unemployment rates, and, during the 1990s, stock prices. This paper uses a vector autoregression to test the importance of unemployment and the stock market in determining monetary policy, and to study the impact of monetary policy on unemployment and the stock market. The results show a shift in both the determinants and the impact of monetary policy in the 1990s from unemployment to the stock market.
