FED Policy has reduced GDP volatility

In the late 1970s the Federal Reserve, under Paul Volcker, effectively abandoned interest rate targets and instead began targeting the money supply. While Fed economists and policy-makers might sometimes advocate "fine-tuning" and discretionary policy, the proof is in the pudding as the volatility in GDP growth has declined considerably since the 1980s. Milton Friedman argued that the test of a good model is its ability to predict. On that basis, the so-called "interventionist" policies seem to have worked.