Premium
Briefing Paper The Debate about Monetary Policy
Author(s) -
BEENSTOCK MICHAEL
Publication year - 1980
Publication title -
economic outlook
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.1
H-Index - 8
eISSN - 1468-0319
pISSN - 0140-489X
DOI - 10.1111/j.1468-0319.1980.tb00239.x
Subject(s) - inflation (cosmology) , economics , money supply , monetary policy , control (management) , monetary base , monetary economics , government (linguistics) , root cause , root (linguistics) , macroeconomics , keynesian economics , operations management , linguistics , philosophy , physics , management , theoretical physics
Summary The main implications from the discussion above are:1 If the PSBR affects the money supply it should also have a direct influence upon inflation. 2 Our research indeed suggests that the PSBR is the root cause of inflation as well as the root cause of monetary growth. 3 The government should therefore be less pre‐occupied with M3 and lay even greater emphasis on the PSBR. 4 It should avoid sinking its energies into money base control. At most some form of money base control is advisable as a precaution. 5 To avoid any further money market disturbances the authorities should resort to a floating rate policy for MLR as was formerly the case.