Federal Reserve Control of the Money Stock: Comment

Ralph Bryant tells us both at the start and at the end of his paper that the issue he discusses is of minor importance. His announced aim is pedagogical; he seeks to eliminate one source of confusion or misperception about monetary control. Some misled economists and 4 4most noneconomists . . . seem to believe that the Federal Reserve can straightforwardly cause the money stock to follow a target path closely— month by month—provided only that the Federal Reserve conscientiously tries to do so." This is not so, Bryant tells us. His paper attempts to explain why. Regrettably, he gives as much attention to transitory fluctuations in float or excess reserves as to serially correlated, persistent disturbances in borrowing or demand deposits. He neglects the serious issues that divide the Federal Reserve and its critics.