"The Fed's ability to control the federal funds rate stems from its ability to alter the supply of liquidity in the … affect the federal funds rate--the liquidity effect. I find that operating procedure was used to guide daily open market … operations; however, there is little evidence of a liquidity effect at the daily frequency and even less evidence at lower …

Despite the fact that efforts to identify it empirically have largely been futile, the liquidity effect plays a central … statistically significant and economically important liquidity effect when nonborrowed reserves is used as the indicator of monetary … a liquidity effect. The paper points out how changes in the demand for borrowed reserves can be used to identify whether …