The comprehensive study that we have undertaken is intended to review our basic thinking regarding price stability with a view to enhancing the transparency of monetary policy over the long run. And it should be understood that it is independent from the current conduct of monetary policy.
Why have monetary aggregates not been more influential in U.S. monetary policymaking, despite the strong theoretical presumption that money growth should be linked to growth in nominal aggregates and to inflation? In practice, the difficulty has been that, in the United States, deregulation, financial innovation, and other factors have led to recurrent instability in the relationships between various monetary aggregates and other nominal variables.