ISBN:
0444880259
Content:
This chapter discusses various aspects of the relation between the supply of money and nominal income and their implications for the conduct of monetary policy. It focuses on the traditional versions of the monetary mechanismthe mechanism through which the monetary authority endeavors to control nominal income. In these versions, the monetary aggregate controlled by the central bank is money as traditionally defined to consist of all the means of payment and the control is assumed to be complete. It examines the nature and stability of the income velocity of the narrow measure of money implied by four basic macroeconomic models: (1) the classical model of the quantity theory of money, (2) a model combining the classical assumptions of perfect price flexibility, (3) the Keynesian model of liquidity preference, and (4) a general macroeconomic model. All models have been expressed in comparable specifications and incorporate additive stochastic terms. The chapter discusses the process of creation of money; money is neither created directly nor rigidly controlled by the central bank. A general issue of the feasibility and desirability of endeavoring to control nominal income through financial aggregates other than the money supply as conventionally defined is also discussed.
In:
Handbook of monetary economics, Amsterdam : North-Holland, 1990, (1990), Seite 399-494b, 0444880259
In:
9780444880253
In:
year:1990
In:
pages:399-494b
Language:
English
DOI:
10.1016/S1573-4498(05)80013-X
URL:
Volltext
(Deutschlandweit zugänglich)
