Richmond Fed Research Challenges the ‘Volcker Disinflation’ Story Richmond, Va.

The Richmond Fed’s latest Economic Brief challenges the standard narrative of the causes of the disinflation that occurred under former Federal Reserve Chairman Paul Volcker.

Economists often describe the Great Inflation of the 1970s as a failure of monetary policy actions of the Federal Reserve under former Chairman Arthur Burns. According to conventional wisdom, after Volcker became Fed chairman in 1979, he implemented abrupt changes in the conduct of monetary policy that curbed inflation. The Richmond Fed Economic Brief argues instead that Volcker’s actions were the culmination of a gradual shift in policy that began under Burns.

The Richmond Fed’s Economic Brief series provides web-exclusive essays on current economic issues and trends. Sign up to receive an email notification when a new essay is posted.

As part of our nation’s central bank, the Richmond Fed is one of 12 regional Reserve Banks working together with the Board of Governors to support a healthy economy and deliver on our mission to foster economic stability and strength. We connect with community and business leaders across the Fifth Federal Reserve District — including the Carolinas, District of Columbia, Maryland, Virginia, and most of West Virginia — to monitor economic conditions, address issues facing our communities, and share this information with monetary and financial policymakers. We also work with banks to ensure they are operating safely and soundly, supply financial institutions with currency that’s fit for distribution, and provide a safe and efficient way to transfer funds through our nation’s payments system.

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