Techniques of Monetary Control in the United Kingdom

Abstract

“New measures” to aid monetary control introduced by the Bank of England in August 1981 are assessed with reference to the monetary base and “flow of funds” models of banking behaviour. Both models are found to be deficient in analysing the supply of “broad” money. However, theories of the banking firm highlight some problems in controlling a broad monetary aggregate. The “new measures” are viewed as a cautious approach to achieve greater flexibility in short‐term interest rates and to minimise the scope for disintermediation and hence are an improvement on previous arrangements for monetary control.

Citation

Cuthbertson, K. (1984), "Techniques of Monetary Control in the United Kingdom", Journal of Economic Studies, Vol. 11 No. 4, pp. 46-68. https://doi.org/10.1108/eb002589