Article: The Science (and Art) of Monetary Policy.

During most of the 1990s, the United States experienced exceptionally good times, and the Federal Reserve received some of the credit for the booming economy and low inflation. Figure 1 shows the marked decline in the civilian unemployment rate from a peak of 7.8% in June 1992 to a low of 3.9% in September 2000. In May 1997, the unemployment rate fell below 5% for the first time since 1973-and it stayed there for the rest of the decade. Although some were concerned that inflation would re-ignite because of tight labor markets, instead it remained in check. In fact, the inflation rate, measured by the Consumer Price Index (CPI), actually declined through most of the 1990s. ...

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