An analysis of the recent weakness in M2 growth that attempts to measure the opportunity cost of the aggregate more accurately and that explores the potential effects of the thrift industry restructuring on the adjustment of money demand to its long-run equilibrium level.

Despite the long history and the substantial evidence supporting the conclusion that persistent changes in the price level are associated with changes in the money supply, the predicted association remains dis-puted. Is it debated because the empirical relationship holds over time periods so...

The period 1979-86 saw (1) high interest rates, (2) volatile money growth, and (3) new Fed operating procedures. Was the third item the chief cause of the other two? Probably not. For much of the increased monetary volatility stemmed not from the new procedures but rather from the public’s...