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Arthur Burns (1979):

"Benign neglect" of the external value of the dollar came to an end dramatically, and I would hope irrevocably, in November 1978.

What event(s) of Nov 1978 is Arthur Burns referring to?

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    $\begingroup$ Could you please add a link to the article or full reference? $\endgroup$ – 1muflon1 Feb 26 at 10:26
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Well, the Fed began raising interest rates to record highs in late 1978. I thought it was mainly to quell inflation. Maybe Burns - who was Fed chairman up to Jan. 1978 - thought it was mainly to strengthen the value of the dollar.

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  • $\begingroup$ Hi, welcome to Economics:Stack Exchange. Please consider improving the answer by adding references from reputable sources. As many other science stacks we encourage links to external sources. See our help center. $\endgroup$ – 1muflon1 Feb 26 at 17:54
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In addition to that, there was still a strong belief in the implication of the Phillips-Curve. Some economists believed that, to decrease unemployment, the Fed had to increase inflation. Then later the Lucas Critique became prominent. More here https://en.wikipedia.org/wiki/Lucas_critique

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