M 2 and Monetary Policy : A Critical Review of the Recent Debate

  title={M 2 and Monetary Policy : A Critical Review of the Recent Debate},
  author={Michael Dotsey and Christopher Otrok},
  • Michael Dotsey, Christopher Otrok
  • Published 1994
R ecently the question of whether a monetary aggregate, and in particular M2, is a useful intermediate target for monetary policy has been the subject of intense debate. The most striking feature of this debate, which has been largely empirical, is that the central issues that are relevant for analyzing M2’s usefulness in the conduct of monetary policy have been neglected. Issues involving the controllability of M2 and the structural relationship between M2 and economic activity have not been… CONTINUE READING

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