| Abstract: | Summary In his article Mr. Timmerman describes the way the Netherlands Bank conducts its so-called narrow monetary policy,i.e. the policy pursued in the money and foreign exchange markets. The developments during the period October 1979–July 1981 serve
as example of how movements in Dutch money market rates are dominated by exogenous factors. The author concludes that in a
small open economy which maintains a stable exchange rate there is no room for an independent money market policy and that
the hectic developments in the international money and foreign exchange markets have made illusory what until very recently
was regarded as the most important objective of the narrow monetary policy,viz. an orderly money market.
P.C. Timmerman was Deputy Director of De Nederlandsche Bank N.V. and is now Managing Director of De Bank van de Nederlandse
Antillen.
A similar article by the author appeared inZoeklicht op beleid, liber amicorum in honour of Professor G.A. Kessler. |
