Source: www.bloomberg.com

Monetary policy should be renamed, according to Federal Reserve Bank of St. Louis Vice President and economist Daniel L. Thornton. The reason: the Fed and most other central banks pay virtually no attention to money.Focusing more on interest rates, which influence the price of credit, rather than monetary aggregates makes the ability of central bankers to affect borrowing costs more limited than they think, said Thornton in a working paper released this week.That conclusion strikes Thornton as particularly useful at a time when central banks are focusing on unconventional policies aimed at … (read more)