In the classical macroeconomic models constructed by Lucas (1972, 1975) and Barro (1976), monetary aggregates are assumed to be generated by a logarithmic random walk. This specification implies that all monetary growth is (a) unanticipated and (b) permanent

Money markets offer monetary services and short-term finance in the capital market with the credit support of institutional sponsors. Investors finance money market instruments at low interest because their salability on short notice confers an implicit monetary services yield. Low interest...

Monetary policy operating procedures have long beendebated within the Federal Reserve and amongmonetary economists at large. For instance, economists havedisagreed about whether a central bank should utilize bankreserves or the interest rate as the policy instrument. For thetime being at least,...