Number: RL31416
Title: Monetary Aggregates: Their Use in the Conduct of Monetary Policy
Authors: Marc Labonte and Gail Makinen, Government and Finance Division 
Abstract: The discussion in this report concentrates primarily on targeting the money supply to achieve such changes in money spending that the goals of full employment and stable prices are met. In recent years, the Fed has targeted interest rates instead of the money supply. An important reason for this choice, as discussed below, is the unstable link between the money supply and money spending. Nevertheless, some economists for several reasons continue to prefer targeting money growth, and seek a stable measure of money as a means of furthering that goal.
Pages: 33
Date: Updated May 15, 2002