M2 and Monetary Policy: A Critical Review of the Recent Debate

19 Pages Posted: 14 Nov 2012

See all articles by Michael Dotsey

Michael Dotsey

Federal Reserve Bank of Philadelphia

Chris Otrok

University of Missouri; Federal Reserve Banks - Federal Reserve Bank of St. Louis

Date Written: 1994

Abstract

Recently an intense debate has focused on M2’s usefulness as an intermediate target for monetary policy. A review of two leading contributions to the debate indicates that their empirical results are sensitive to changes in key assumptions. Moreover, their empirical results lack the deep structural foundations that are necessary for reliable policy analysis.

Suggested Citation

Dotsey, Michael and Otrok, Christopher, M2 and Monetary Policy: A Critical Review of the Recent Debate (1994). FRB Richmond Economic Quarterly, vol. 80, no. 1, Winter 1994, pp. 41-59, Available at SSRN: https://ssrn.com/abstract=2125397

Michael Dotsey (Contact Author)

Federal Reserve Bank of Philadelphia ( email )

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Christopher Otrok

University of Missouri ( email )

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Federal Reserve Banks - Federal Reserve Bank of St. Louis ( email )

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