Corpus ID: 55259457

The Price of Gold and Monetary Policy

  title={The Price of Gold and Monetary Policy},
  author={W. D. Lastrapes and George A. Selgin},
  • W. D. Lastrapes, George A. Selgin
  • Published 1996
  • Economics
  • Pronouncements by Alan Greenspan and others suggest a role for the price of gold in shaping monetary policy. Here, we look for evidence of such a role by examining the comovement of gold prices and the federal funds rate, by reviewing FOMC minutes, and by estimating a VAR model that identifies the Fed’s response to fluctuations in the price of gold by controlling for other relevant policy variables. We find evidence that, since the early 1980’s, the Fed has responded to sustained changes in… CONTINUE READING

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