See Harry G. Johnson (1962), “Monetary Theory and Policy,” American Economic Review, vol. 52 (June), pp. 335-84. 10. As noted in my 1993 article, I did not find that criticism compelling. 11. See Robert Barro and Herschel Grossman (1976), Money, Employment and Inflation (New York: Cambridge University Press). 12.
The better the central bank’s risk management, the better the liquidity services the central bank can provide for a given risk budget; or, the other way round, the less risk it will have to take on for a given set of liquidity services. 4.