Monetary Policy in the United States

Monetary Policy in the United States

Monetary Policy in the United States

Monetary Policy in the United States

Excerpt

There are several ways in which one can approach monetary policy. One is to emphasize history, to discuss the origin and evolution of our present central bank and the actions it has taken in various years. The other is to focus on an evaluation of monetary policy by discussing the advantages and disadvantages of monetary policy as a stabilization tool. Within a short book one cannot do both adequately and I have chosen the latter alternative. This has the advantage of dealing with currently relevant issues rather than with the issues of the past. It does, however, have one disadvantage--the problems discussed in this book are still unsettled. I have tried to present both sides of the numerous debates, with the result that the reader may find himself in the position of the businessman who wanted to hire a one-armed economist since he was tired of hearing the man's predecessor say, "On the one hand . . . but on the other hand." However, this cannot be helped. Monetary policy is a field in which economists have achieved very considerable insight but little agreement. To pretend that there is agreement by presenting primarily one point of view would be less than candid. Similarly, to avoid controversial problems by ignoring them and discussing, instead, "factual" material such as changes in the Federal Reserve Act, would give the reader little perspective on current problems. Having to choose among the three risks of being bewildering, less than candid, or irrelevant, I chose the first of these. I am dealing with unsettled issues because the unsettled issues are, unfortunately, the significant ones.

In writing this book I have tried to keep in mind that monetary . . .

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