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- Title
Timeliness and the Fed's Daily Tactics.
- Abstract
The paper contributes to the monetary economics literature in general by providing a detailed analysis of the U.S. Federal Reserve's daily tactics, while also serving as a statement on this topic from an institutionalist perspective. The first section explains the concept of timeliness and its relationship to analysis of time in real world systems and to author John R. Commons' concept of working rules. The second section describes the relevant categories of time or event sequences the Open Market Desk must be concerned with in its tactics and interprets recent events in monetary policy implementation from within this context. The third section illustrates how the discussion of timeliness in the Federal Reserve's daily tactics can inform research on traditional topics in monetary economics and argues that the payments system, rather than reserve requirements, is the proper starting point for analysis of the Federal Reserve's daily tactics; The paper also argues that there is no liquidity effect in the federal funds market and that the direct control over the monetary base is not possible. That the conclusions reached in the third section support the conclusions reached by proponents of the Post Keynesian endogenous money approach is not surprising, as their research has similarly focused upon the interactions of real world institutions within the financial system.
- Subjects
UNITED States; MONETARY policy; UNITED States. Federal Reserve Board; UNITED States economic policy; COMMONS, John R. (John Rogers), 1862-1945; FEDERAL funds market (U.S.)
- Publication
Journal of Economic Issues (Association for Evolutionary Economics), 2003, Vol 37, Issue 4, p851
- ISSN
0021-3624
- Publication type
Article
- DOI
10.1080/00213624.2003.11506634