It is widely believed that the money stock of the United States, somehow defined, should play a central role in the conduct of Federal Reserve monetary policy. In particular, it is believed that the Federal Reserve should publicly announce a target time path for the money stock and then try to make the actual stock follow that path closely. The analytical basis for this approach to monetary policy, however, is seriously deficient. Debate seldom focuses on the important issues that are genuinely controversial; instead it becomes mired in confusion and.
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