Introduction

This part conclusion presents some closing thoughts on the key concepts discussed in the preceding chapters. The part examines the divergence in the measured growth rates of different monetary aggregates; the difference between the growth rates of Ml and M2 seems to be unprecedented in the postwar period. It presents appearances are deceiving: the behavior of both Ml and M2 is consistent with historical patterns, and explains in the context of shifts in other economic variables. The part summarizes the literature on optimal monetary growth, and argues that changes in monetary policy always have engendered shifts in economic activity only after a time lag. It deals with consideration of whether discretionary shifts in monetary policy can or ought to be used to offset the effects of such economic shocks as sudden increases in the price of oil.