Journal Article
M2 and monetary policy
Abstract: Consistent with its mandate in the Humphrey-Hawkins Act of 1978, the Federal Reserve System each year sets a calendar-year target for the monetary aggregate M2. This paper examines the effect of specifying the M2 target as a multiyear trend line and concludes that an operationally significant target for M2 in the form of a trend line that rises at three percent per year will eliminate inflation.
Keywords: Money supply; Monetary policy;
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Bibliographic Information
Provider: Federal Reserve Bank of Richmond
Part of Series: Economic Review
Publication Date: 1989
Volume: 75
Issue: Sep
Pages: 14-29