Abstract
The paper addresses the issue of the impact of the foundation of the Federal Reserve System in 1914 on the behavior of short-term interest rates. Empirical evidence is presented showing that no change of regime can be detected in the process governing short-term rates in the years straddling the foundation of the Fed. Since the behavior of this process did change in the decade 1910–1920, the paper discusses some historical events and institutional changes in the New York money market that had an impact on the behavior of short-term interest rates between 1908 and 1920.
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