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KEY POINTS As Fed chief under Presidents Carter and Reagan, Paul Volcker helped tame inflation, but with 20% interest rates that also crunched the economy.

"Volcker set the table for the long economic expansions of the 1980s and 1990s," former St. Louis Fed President William Poole said in a 2005 tribute.

After the Great Recession, Volcker inspired a namesake regulation, the Volcker rule, which sought to rein in commercial banks by prohibiting them from making risky investments in hedge funds and private equity firms.

Paul Volcker, who as chairman of the Federal Reserve under Presidents Jimmy Carter and Ronald Reagan helped tame inflation with 22% interest rates that also crunched American manufacturing, farming and real estate but led the way to two decades of expansion, has died. He was 92. He died Sunday at 5 p.m. ET at his home in New York, according to the Volcker Alliance, a nonpartisan, nonprofit organization he founded in 2013 — when he was age 86 — to promote public service. "Paul A. Volcker was a giant among American public servants," Alliance President Thomas W. Ross said in a statement Monday. "He was a man of great courage and integrity who committed most of his working life to the public good. He believed in the importance of an effective government to our democracy. He cared deeply about the future of America and those who serve in our government." "Paul Volcker was an inspiration to me and to everyone in the Federal Reserve," said Janet Yellen, Fed chair under Presidents Barack Obama and Donald Trump. "He embodied the values we hold most dear: devotion to public service, the courage to do the right thing, even when it's immensely unpopular, a commitment to strong and effective regulation of the banking system and the highest ethical standards. We have Paul Volcker to thank for taming inflation and ushering in a long period of macroeconomic stability." Years after the Great Recession, Volcker headed Obama's Economic Recovery Advisory Board and pushed to create a namesake regulation, the Volcker rule, which sought to rein in commercial banks by prohibiting them from making the risky investments that helped spark the 2007 financial crisis. The cigar-smoking Volcker, who stood 6 feet, 7 inches and was known as "Tall Paul," became Fed chairman under Carter in August 1979, was renominated by Reagan in 1983 and served until 1987. Even before his 1979 nomination, he had a reputation as an inflation buster. "In terms of economic stability in the future, that [inflation] is what is likely to give us the most problems and create the biggest recession," Volcker said in a 1979 Federal Open Markets Committee meeting months before he became the central bank's chairman. The inflation rate was 1% under President Lyndon Johnson in 1965 but ballooned to a breakneck 14.8% in March 1980. To combat the price rises, Volcker's Fed jacked up the federal funds rate and tightened the money supply. The rate, used by banks and credit unions for overnight loans to other depository institutions, reached a record 22.36% in July 1981. (By comparison, it was zero to 0.25% from December 2008 to December 2015, during the financial crisis and its aftermath.) Shortly after becoming Fed chairman, Volcker raised the discount rate by 0.5%, which would be considered a sizable jolt today.

Paul Volcker, former chairman of the U.S. Federal Reserve. Peter Foley | Bloomberg | Getty Images

One of his big concerns was to change the expectations, and hence the actions, of people who believed prices would continue to rise rapidly. "We are dealing with an inflationary momentum, and patterns of thinking and behavior, that have developed over decades," Volcker told the National Press Club in September 1981. "Something like half the working population — those under age 35 — have never known price stability in their working experience. ... We have become accustomed to living with inflation, adjusting to it — and anticipating more. And as we have done so, we unwittingly set in motion forces that have kept it going." Read more: Here's how Paul Volcker learned to hate inflation Within two years of the Fed's peak interest rate, inflation fell below 3%, ending the period dubbed the Great Inflation. Still, the high interest rates had their stifling effects. The economy plunged into recession. Before the 2007-09 bust, the 1981-82 recession had been the worst economic downturn in the United States since the Great Depression. The unemployment rate in 1982 hit 10.8% — more than 1 in 10 would-be workers — still the highest since 1940. Volcker was vilified. A trade publication, the Tennessee Professional Builder, published a "wanted" poster of Volcker in early 1982 and accused him and the Fed of "premeditated and cold-blooded murder of millions of small businesses." "Without his bold change in monetary policy and his determination to stick with it through several painful years, the U.S. economy would have continued its downward spiral," William Poole, former president of the St. Louis Federal Reserve, wrote in a 2005 tribute. "By reversing the misguided policies of his predecessors, Volcker set the table for the long economic expansions of the 1980s and 1990s."

Paul Volcker speaks while President Barack Obama listens before he signed an executive order establishing the Economic Recovery Advisory Board on Feb. 6, 2009, in Washington, DC. Mark Wilson | Getty Images