Paul Volcker is often given credit for defeating the inflation dragon. Discuss how Volcker”s actions influenced perceptions of:
a. The role of money versus the funds rate as a target for policy.
b. The role of inflation and the dollar as signals of the effectiveness of policy.
c. The importance of the independence of the Fed.
d. The importance of presidential support for the Fed”s independence.
e. The perceived limit on policy due to the Phillips Curve in the short run and the problem of stagflation in the late 1970s.