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Monetary policy rule to be effective

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Reference no: EM132550614

Monetarists, claim that central banks have to keep the money supply growing at a steady rate. They believe that fluctuations in the money supply are responsible for most large fluctuations in the economy.They argue that slow and steady growthin the money supply would yield stable output, employment, and prices.On the other hand, some economists believethat monetarist policy rule would work only under a certain circumstance otherwise it would be useless. According to these economists what is necessary for the monetary policy rule to be effective?

Reference no: EM132550614

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