Short-run monetary control: Evidence under a non-borrowed reserve operating procedure

This paper examines two issues — the prediction and short-run control of the money stock — associated with the experience following the Federal Reserve's adoption of a non-borrowed reserve-oriented operating procedure in October 1979. Regarding predictability, our analysis suggests that econometric models offer no improvement over the Board's judgmental forecasting procedure in terms of a lower multiplier forecast error. Regarding the question of whether alternative operating targets would have lowered monthly variability in the money stock, our findings suggest that neither a total reserve nor a monetary base operating target would have enhanced the precision of short-run monetary control relative to a non-borrowed reserve operating target.     

BRITISH POTATO STABILISATION POLICY IN A EUROPEAN CONTEXT

This paper presents a simulation model, based on a stochastic spatial equilibrium framework, for the GB potato market, allowing for trade with the Continent and the operation of domestic stabilisation policy. The model is used to explain the operation of the two policy instruments — support buying and area control — and to evaluate policy options and consequences. The notion of a cost-effective support buying programme is introduced and it is found that current policy is in the region of cost-effectiveness. Quota area, subject to the constraint that downside price risk is avoided, is found to lead to a trade-off between the consumer interest and the financial cost of policy. This trade-off is examined in a conventional welfare analysis and in probability terms. Subject to certain caveats, it is concluded that current policy tends to provided price stabilisation rather than price enhancement for producers.     

The cash flow statement: The tip of an iceberg

The newly required Statement of Cash Flows provides helpful information, as long as the reader takes care to look below the water line.