Money Supply Control in the U.S.

Abstract

It also is true in London, Paris, Frankfurt, Milan, Zurich. The Federal Reserve’s influence on the American economy radiates out from the New York money market. There is much in monetary economics, so rooted in institutional arrangements, akin to Maitland’s dictum that substantive law is secreted in the interstices of procedure. And physical analogies are correspondingly dubious: there is no close correspondence in monetary economics with say wave-like or corpuscular-like theories of emanation; the money market’s reactions to Federal Reserve actions are not mathematically well defined. For one thing, the Federal Reserve never clearly etches out its programme of action. Nor is it clear that the Board ever has a completely worked out programme: one studies the Board in the way that one studies other organisms uncertainly responding in broadly optimizing ways to phenomena of uncertain purport and origin.