This paper investigates the impact of unanticipated changes in the money stock on the money, stock and foreign exchange markets. Nearly all the empirical work to date indicates that both interest rates and the foreign exchange value of the dollar rise and stock prices fall in response to an...

This brief essay is a working draft of an article in preparation for the forthcoming International Encyclopedia of the Social Sciences, 2nd ed., examining the role of the monetary base in monetary economics and monetary policymaking. Comments are welcome.