Comments on Bonomo and Schotta: The Effect of Federal Open Market Operations on Variations in Member Bank Reserves

2012-02-27T00:00:00Z (GMT) by Allan Meltzer

The authors attempt to test the proposition that defensive open market operations increase the variance or standard deviation of the monetary base. The test consists of a comparison of the standard deviations of levels and changes in reserves and in free reserves with the standard deviation of levels and changes in the open market portfolio.