Index 741 market-neutral strategies, 305 Market Risk Amendment, 230 Marshall, Alfred, 551 Martin, William McChesney Jr., 393n MasterCard, 260 maturity, 20 maturity bucket approach, 335 maturity buckets, 335 maturity date, 59 Mayer, Colin, 31n MBNA, 269 McCallum, Bennett, 688, 691n mean-reverting, 125n measurement of interest rates, 59 71 of money, 49 54 medium of exchange, 44 45 Meiselman, David, 648n Meltzer, Alan, 688 Mercantile Bank, 241 merger review policy, 284 285 Meriwether, John, 306 Merrill Lynch, 208, 209, 273, 283n Merrill Lynch HSBC, 283n Merton, Robert, 306 Mexico currency, collapse of, 221 debt market, 221 financial crises in, 217 222 foreign exchange crisis, 533 534 foreign lending to, 279, 280 micro hedge, 353 Microsoft Excel, 13 Mihov, Illian, 109n Milken, Michael, 261 Miller, Merton, 359 Mills, Terence C., 382n Mishkin, Frederic S., 78n, 132n, 187n, 440n, 467n, 475n, 480n, 489n, 510n, 644n, 658n, 710n mismanagement of financial liberalization/innovation, 200 202 modern quantity theory of money, 563 567 Modernized Standards By-law, 245 Modigliani, Franco, 649n, 655n Molik, Terence E., 54n monetarism, 485 monetarist evidence, 645 650 monetarists, 630 monetary aggregates, 50 53, 51t monetary base, 385, 405, 408 414, 519 monetary conditions, 440 A Monetary History of the United States (1867-1960) (Friedman and Schwartz), 425 426, 649 650 monetary liabilities, 405 406 monetary neutrality, 511 monetary policy see also Bank of Canada aggregate output, response of, 601 602 aggregate output in long run, 612 asset-price bubbles, 483 484 Bank of Canada s policy rate, 433 434 channel/corridor system, 436, 437 439, 449 450 complete crowding out, 606 607 conduct of, defined, 9, 596 and differential regional effects, 659 discretionary/nondiscretionary policy debate, 684 688 economic fluctuations and, 642 and the economy, 440 441 at effective lower bound for the overnight rate, 450 451 exchange rate considerations, 540 exchange rate targeting, 540 546 vs fiscal policy, effectiveness of, 603 610 and GDP, 653f goal of, 439 implementation framework, 432 437 with implicit nominal anchor, 472 475 inflation targeting, 466 472 inflationary monetary policy, 673 683 interest rate, response of, 601 602 international considerations, 539 540 Japan, 662 663 just it approach, 472 475 Large Value Transfer System (LVTS), 432 433, 435 lessons for, 660 662 market for settlement balances, 437 439 monetary targeting strategy, 462 466 and nominal interest rates, 441 443, 660 661 non-LVTS (ACSS) transactions, 433 open market operations, 443 445 operating band for the overnight interest rate, 434, 437 policy instrument, choice of, 476 479 policy mix, 605 policy procedures, historical perspective, 485 490 Receiver General auctions, 446 447 settlement balances management, 445 452 settlement balances target level, 448 449 standing liquidity facilities, 436 437 and stock prices, 146 strategies, advantages and disadvantages of, 474t study of, 7, 10 swaps with Exchange Fund Account, 447 448 tactics, 476 481 Taylor rule, 479 481 at times of crisis, 453 transmission mechanisms See transmission mechanisms of monetary policy unanticipated price level fluctuations, 662 uncertainty over conduct of, 398n Monetary Policy Report, 383, 389 monetary targeting, 462 466 from 1975 to 1981, 485 487 advantages and disadvantages, 466 Canada, 463 464 described, 462 Germany, 464 466 Japan, 464 United States, 463 monetary theory defined, 7, 551 Keynesian approach, 556 563 liquidity preference theory, 556 559 modern quantity theory of money, 563 567 quantity theory of money, 552 554 velocity, as constant, 555 556 monetizing the debt, 677 money base money, 384 385 and business cycles, 7, 7f cashless society, 50 cheques, 48 commodity money, 47 48 defined, 6, 43 44 demand for money See money demand e-money (electronic money), 49 and economic activity, 651 electronic payment, 49 equation of exchange, 552 553 fiat money, 48 functions of money, 44 47 growth of, and inflation, 669 670 growth of, and interest rates, 106 109, 107f, 108f high-powered money, 408 importance of, 642 643, 645 650 and inflation, 9, 667 668 and interest rates, 9, 9f, 105 M1+, 51t, 52 M1++, 51t, 52, 53f M2, 51, 51t, 53f M2+, 51t, 52 M2++, 51t, 52, 53f M3, 51 52, 51t market for money See market for money meaning of money, 43 44 measurement of, 49 54 as medium of exchange, 44 45 in modern prisons, 46 monetary aggregates, 50 53, 51t monetary theory See monetary theory money market See money market need for money, 45 payments system, evolution of, 47 49 in prison-of-war camps, 46 real money balances, 557 558 reliability of money data, 54 as store of value, 46 47 study of, 10 supply of money See money supply as unit of account, 45 46