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- Title
Recent Monetary Developments and Controversies.
- Authors
Lindsey, David E.
- Abstract
The article focuses on monetary developments and controversies. Economic developments during the past year were distinctly unkind to the nostrums of monetary economists. The phenomenal growth of negotiable orders of withdrawal and money market mutual fund shares and, more recently, the emergence of retail sweep accounts reopened questions about the stability of money demand and the value of monetary aggregates as intermediate targets. The stubborn persistence of high interest rates in the face of unwinding inflation and deepening recession puzzled many economists. Observing the continued volatility of both interest rates and money, some critics of the Federal Reserve's new operating procedures concluded that short-run monetary control was receiving too little attention while other critics concluded just the reverse. This article examines whether financial innovations have perceptibly altered the velocity of various monetary aggregates, with special emphasis on the experience over 1981 as a whole. Recent quarterly data on relations among money demand, short-term interest rates, real income, and prices have been discussed.
- Subjects
MONETARY policy; PRICE inflation; MONEY market; NOW accounts; BANK accounts; MUTUAL funds
- Publication
Brookings Papers on Economic Activity, 1982, Issue 1, p245
- ISSN
0007-2303
- Publication type
Article
- DOI
10.2307/2534321