Money, Credit and the Monetary Mechanism

Franco Modigliani and Lucas Papademos
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Lucas Papademos: Bank of Greece

Chapter 6 in Monetary Theory and Economic Institutions, 1987, pp 121-160 from Palgrave Macmillan

Abstract: Abstract The rôle of the economy’s financial structure and institutions in determining the functioning of the monetary mechanism and the effectiveness of monetary policy has attracted a lot of attention in recent years. The ongoing innovations and fundamental structural changes in domestic and international financial markets have led to a serious reassessment of the efficiency of conventional monetary policies.1 One issue debated extensively by economic policy-makers is whether, in a changing and uncertain financial environment, monetary policy can achieve a target path of nominal income more effectively by targeting and monitoring credit or broad monetary aggregates, rather than by controlling the conventional narrow measure of the stock of money.

Keywords: Central Bank; Bank Loan; Income Elasticity; Money Demand; Bank Credit (search for similar items in EconPapers)
Date: 1987
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Persistent link: https://EconPapers.repec.org/RePEc:pal:intecp:978-1-349-08781-5_6

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DOI: 10.1007/978-1-349-08781-5_6

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