BASE DRIFT AND THE LONGER RUN GROWTH OF. M1: EXPERIENCE FROM A DECADE OF MONETARY TARGETING.

The article discusses a technical aspect of the monetary targeting procedure of the Federal Reserve which is known as base drift. Fed announced target ranges for the growth of M1 and other monetary aggregates since 1975. The term base drift, refers to the Fed's practice of using the actual dollar level of an aggregate in the base quarter as the base level for the target range, rather than the midpoint of the targeted range set in the preceding targeting period.