Money multiplier research which I have conducted (e.g. - AEJ, 1999; American Economist, 2006) has led me to conclude that institutional changes have rendered monetary base changes virtually irrelevant. Monetary base (MB) changes are now mainly currency changes determined by user demand, and thus, are beyond the control of the Federal Open Market Committee (FOMC). Moreover, changes in the MB have no predictable link to deposit creation. Thus, MB targeting is largely unworkable, and any such targeting would accomplish little in the way of overall monetary control.
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