Once more on monetary policy, the Reserve Bank and ‘control’.
Listener 21 May, 1994 This is the fourth of a sequence of four columns written in the early 1990s about monetary policy, which continue to be relevant today. They are
The Hole in the Reserve Bank
What the Reserve Bank Believes
Who Controls the Exchange Rate?
The Meaning of Influence
Keywords Macroeconomics & Money
In his April 16 reply to my Who Controls the Exchange Rate?, the Governor of the Reserve Bank tried to distinguish between “control” and “influence” of the exchange rate. Since I want to avoid arguments about words rather than things, I shall withdraw the use of the term “control”. (I was using it in the way systems engineers do.) So let me rephrase and simplify my argument.