Open-Loop v. Closed-Loop Money Supply Control Systems

M. L. Burstein

Chapter 5 in Modern Monetary Theory, 1986, pp 58-79 from Palgrave Macmillan

Abstract: Abstract Should money supply (or liquid-asset supply) adhere to an expansion path that is unresponsive to events in the economy? Or should the money-supply process include a feedback channel? We must choose between open-loop and closed-loop control systems (see Allen, 1967, pp. 97–9). Figure 5.1 illustrates this schematically: Figure 5.1 Open-loop and Closed-loop control systems

Keywords: Interest Rate; Monetary Policy; Central Bank; Money Supply; Supply Shock (search for similar items in EconPapers)
Date: 1986
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DOI: 10.1007/978-1-349-18070-7_5

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